Author 
Message 
TAGS:

Hide Tags

Manager
Joined: 01 Nov 2010
Posts: 134
Location: Zürich, Switzerland

A merchant purchased a jacket for $60 and then determined
[#permalink]
Show Tags
Updated on: 05 Feb 2012, 14:55
Question Stats:
61% (01:15) correct 39% (03:34) wrong based on 500 sessions
HideShow timer Statistics
A merchant purchased a jacket for $60 and then determined a selling price that equalled the purchase price of the jacket plus a markup that was 25 percent of the selling price. During a sale, the merchant discounted the selling price by 20 percent and sold the jacket. What was the merchant’s gross profit on this sale? (A) $0 (B) $3 (C) $4 (D) $12 (E) $15
Official Answer and Stats are available only to registered users. Register/ Login.
Originally posted by Sarang on 06 Nov 2010, 14:32.
Last edited by Bunuel on 05 Feb 2012, 14:55, edited 1 time in total.
Edited the question and added the OA




Math Expert
Joined: 02 Sep 2009
Posts: 49320

Re: Profit from a Jacket
[#permalink]
Show Tags
06 Nov 2010, 21:34
Sarang wrote: A merchant purchased a jacket for $60 and then determined a selling price that equalled the purchase price of the jacket plus a markup that was 25 percent of the selling price. During a sale, the merchant discounted the selling price by 20 percent and sold the jacket. What was the merchant’s gross profit on this sale?
(A) $0 (B) $3 (C) $4 (D) $12 (E) $15 No, answer A is not correct. Note that we are told that: "markup ... was 25 percent of the selling price". Step by step: Let the markup be \($x\), so \(x\) must be 25% of the selling price \(60+x\): \(x=0.25(60+x)\) > \(x=20\) > selling price will be \(60+20=80\). The price after discount of 20% will be \(80*0.8=64\) > gross profit on the sale will be final selling price  cost of the jacket = \($64  $60 = $4\). Answer: C.
_________________
New to the Math Forum? Please read this: Ultimate GMAT Quantitative Megathread  All You Need for Quant  PLEASE READ AND FOLLOW: 12 Rules for Posting!!! Resources: GMAT Math Book  Triangles  Polygons  Coordinate Geometry  Factorials  Circles  Number Theory  Remainders; 8. Overlapping Sets  PDF of Math Book; 10. Remainders  GMAT Prep Software Analysis  SEVEN SAMURAI OF 2012 (BEST DISCUSSIONS)  Tricky questions from previous years.
Collection of Questions: PS: 1. Tough and Tricky questions; 2. Hard questions; 3. Hard questions part 2; 4. Standard deviation; 5. Tough Problem Solving Questions With Solutions; 6. Probability and Combinations Questions With Solutions; 7 Tough and tricky exponents and roots questions; 8 12 Easy Pieces (or not?); 9 Bakers' Dozen; 10 Algebra set. ,11 Mixed Questions, 12 Fresh Meat DS: 1. DS tough questions; 2. DS tough questions part 2; 3. DS tough questions part 3; 4. DS Standard deviation; 5. Inequalities; 6. 700+ GMAT Data Sufficiency Questions With Explanations; 7 Tough and tricky exponents and roots questions; 8 The Discreet Charm of the DS; 9 Devil's Dozen!!!; 10 Number Properties set., 11 New DS set.
What are GMAT Club Tests? Extrahard Quant Tests with Brilliant Analytics




Manager
Joined: 03 Sep 2010
Posts: 65
Location: Israel
GMAT 1: 660 Q47 V34 GMAT 2: 670 Q48 V34
GPA: 3.2
WE: Operations (NonProfit and Government)

Re: Profit from a Jacket
[#permalink]
Show Tags
06 Nov 2010, 14:38
60*1.25=75 75*0.8=60 6060=0 the answer is A



Retired Moderator
Joined: 16 Nov 2010
Posts: 1451
Location: United States (IN)
Concentration: Strategy, Technology

Re: A merchant purchased a jacket for $60 and then determined a selling pr
[#permalink]
Show Tags
02 Apr 2011, 07:40
Markup = x x = 0.25(60 + x) => 3x/4 = 15 => x = 20 So SP = 80 But Actual SP = 0.8 * 80 = 64 So profit = $4 Answer  C
_________________
Formula of Life > Achievement/Potential = k * Happiness (where k is a constant)
GMAT Club Premium Membership  big benefits and savings



Manager
Joined: 03 Jun 2010
Posts: 149
Location: United States (MI)
Concentration: Marketing, General Management
WE: Business Development (Consumer Products)

Re: A merchant purchased a jacket for $60 and then determined a selling pr
[#permalink]
Show Tags
02 Apr 2011, 07:45
Acer86 wrote: A merchant purchased a jacket for $60 and then determined a selling price that equalled the purchase price of the jacket plus a markup that was 25 percent of the selling price. During a sale, the merchant discounted the selling price by 20 percent and sold the jacket. What was the merchant’s gross profit on this sale? (A) $0 (B) $3 (C) $4 (D) $12 (E) $15 Selling price is sp, so \(sp=60+0.25*sp\), where \(m*0.25\) is a markup sp=80 Discounted the sp by 20% means \(sp0.2sp=0.8sp\) \(0.8sp=0.8*80=64\) Gross profit = 64purchase price = 6460=4 (C)



Veritas Prep GMAT Instructor
Joined: 16 Oct 2010
Posts: 8288
Location: Pune, India

Re: A merchant purchased a jacket for $60 and then determined a selling pr
[#permalink]
Show Tags
02 Apr 2011, 08:00
Acer86 wrote: A merchant purchased a jacket for $60 and then determined a selling price that equalled the purchase price of the jacket plus a markup that was 25 percent of the selling price. During a sale, the merchant discounted the selling price by 20 percent and sold the jacket. What was the merchant’s gross profit on this sale? (A) $0 (B) $3 (C) $4 (D) $12 (E) $15 First of all, the question has very ambiguous language. They have to distinguish between marked price and selling price and they fail to do that. This is what the question needs to change: A merchant purchased a jacket for $60 and then determined a markup price that equaled the purchase price of the jacket plus a markup that was 25 percent of the markup price. During a sale, the merchant discounted the markup price by 20 percent and sold the jacket. What was the merchant’s gross profit on this sale? Here, mark up was 25% of markup price so purchase price was 75% of markup price i.e. purchase price was increased by 33.33% to get mark up price (25 is 33.33% of 75) \((1 + Mark Up%) * (1  Discount%)= (1 + Profit%)\) \((1 + \frac{1}{3})*(1 \frac{1}{5}) = (1 + Profit%)\) \(Profit% = \frac{1}{15}\) Hence you get a profit of $1 for every $15 of purchase price. Since purchase price is 4*15, profit will be 4. For more on the formula and concept of Mark up, discount, check: http://www.veritasprep.com/blog/2011/02 ... ntprofit/
_________________
Karishma Veritas Prep GMAT Instructor
Learn more about how Veritas Prep can help you achieve a great GMAT score by checking out their GMAT Prep Options >
GMAT selfstudy has never been more personalized or more fun. Try ORION Free!



Director
Joined: 01 Feb 2011
Posts: 670

Re: A merchant purchased a jacket for $60 and then determined a selling pr
[#permalink]
Show Tags
02 Apr 2011, 12:14
Actual Cost = $60 SP = Actual Cost + Mark up
= Actual Cost + 25% SP
= 60*100/75
on sale SP = 80/100(60*75/100) = 64
Gross profit = $4
Answer is C



Magoosh CoFounder
Joined: 17 Sep 2011
Posts: 41
Schools: UC Berkeley (Haas)  Class of 2010

Re: percentages
[#permalink]
Show Tags
11 Dec 2011, 21:50
This is a bit tricky, it's all in the details. I suspect you read the question like this: Merchant purchases jacket for $60 Merchant prices jacket at 25% more than purchase price. 20% more than $60 = $75 Merchant sells jacket at %20 off. 20% off of $75 = $60 Merchant makes $0 because he bought and sold at $60 But the question actually reads like this: Merchant purchases jacket for $60 Merchant prices jacket at purchase price + 25% of selling price. Note the difference. Let's break this down. Selling price = purchase price + 25% of selling price 75% of Selling price = purchase price Selling price = $60/75% = $80 Now we can finish the question... Merchant sells jacket at %20 off. 20% off of $80 = $64 Merchant makes $4 because he bought at $60 and sold at $64. I hope that helps!
_________________
Bhavin Parikh Magoosh Test Prep



Manager
Joined: 26 Apr 2011
Posts: 214

Re: percentages
[#permalink]
Show Tags
11 Dec 2011, 22:38
OA is C purchase price + 25% selling price= 100% selling price 60+ 25% SP= 100% SP 60= 75% SP
s0 100 % SP =80
now 20 % sale means 20 % of 80 = 16 so he sold the jacket at 8016 = 64 $ total profit = 6460 = 4 $



Senior Manager
Joined: 18 Sep 2009
Posts: 317

Re: percentages
[#permalink]
Show Tags
12 Dec 2011, 09:41
Let the cost price is C,selling price is S. C=60. S=C+0.25(S) 0.75(S)=C 3/4(S)=60 S=60*4/3=80. seller gave a discount of 20% on selling price which is 80. 80*1/5=16(discount price) Selling price Discount price=8016=64 (selling price after discount) Gross profit= selling price after discount cost price.=6460=4



SVP
Status: The Best Or Nothing
Joined: 27 Dec 2012
Posts: 1834
Location: India
Concentration: General Management, Technology
WE: Information Technology (Computer Software)

Re: A merchant purchased a jacket for $60 and then determined
[#permalink]
Show Tags
25 Nov 2013, 23:03
Let selling price = x So, x = 60 + 25x/100 Calculating above, x = 80 Selling price = 80 20% Discount on Selling price = 64 So, profit = 6460 = 4 Answer = C
_________________
Kindly press "+1 Kudos" to appreciate



Manager
Joined: 14 Sep 2014
Posts: 88
WE: Engineering (Consulting)

Re: A merchant purchased a jacket for $60 and then determined
[#permalink]
Show Tags
18 Jul 2015, 01:39
SP = 60 + 0.25SP
SP = 80 20% discount Discounted SP = 80 * 0.8 = 64
Profit = 4



Current Student
Status: DONE!
Joined: 05 Sep 2016
Posts: 390

Re: A merchant purchased a jacket for $60 and then determined
[#permalink]
Show Tags
06 Dec 2016, 20:09
PP = purchasing price SP = selling price
PP=$60 SP=PP+0.25SP > 0.75SP=0.60 >SP=$80
20% off SP = 0.80(80) = $64 (price customer paid)
6460 = $4 profit
C.



Intern
Joined: 03 Sep 2016
Posts: 3

Re: A merchant purchased a jacket for $60 and then determined
[#permalink]
Show Tags
15 May 2017, 22:28
hey, is this really 700+ level question in gmat?



Math Expert
Joined: 02 Sep 2009
Posts: 49320

Re: A merchant purchased a jacket for $60 and then determined
[#permalink]
Show Tags
15 May 2017, 23:10



Intern
Joined: 03 Sep 2016
Posts: 3

Re: A merchant purchased a jacket for $60 and then determined
[#permalink]
Show Tags
15 May 2017, 23:15
Bunuel wrote: saarthak29 wrote: hey, is this really 700+ level question in gmat? The difficulty level is calculated automatically based on the timer stats from the users which attempted the question. So, yes it is a 700level question. hey, is it possible to send you private message?



Math Expert
Joined: 02 Sep 2009
Posts: 49320

Re: A merchant purchased a jacket for $60 and then determined
[#permalink]
Show Tags
15 May 2017, 23:18



Target Test Prep Representative
Status: Founder & CEO
Affiliations: Target Test Prep
Joined: 14 Oct 2015
Posts: 3515
Location: United States (CA)

Re: A merchant purchased a jacket for $60 and then determined
[#permalink]
Show Tags
19 May 2017, 06:20
Sarang wrote: A merchant purchased a jacket for $60 and then determined a selling price that equalled the purchase price of the jacket plus a markup that was 25 percent of the selling price. During a sale, the merchant discounted the selling price by 20 percent and sold the jacket. What was the merchant’s gross profit on this sale?
(A) $0 (B) $3 (C) $4 (D) $12 (E) $15 We are given that a jacket was purchased for 60 dollars. The jacket was sold for a price that equalled the purchase price of the jacket plus a markup that was 25 percent of the selling price. We can let the selling price = p, and thus the selling price is 60 + 0.25p. We can create the following equation and solve for p: p = 60 + 0.25p Multiply the equation by 4, we have: 4p = 240 + p 3p = 240 p = 80 Since the selling price was then discounted 20%, the discounted price was: 0.8(80) = 64 Thus, the profit on the sale was 64  60 = $4. Answer: C
_________________
Scott WoodburyStewart
Founder and CEO
GMAT Quant SelfStudy Course
500+ lessons 3000+ practice problems 800+ HD solutions



Manager
Joined: 12 Jun 2016
Posts: 218
Location: India
Concentration: Technology, Leadership
WE: Sales (Telecommunications)

Re: A merchant purchased a jacket for $60 and then determined
[#permalink]
Show Tags
17 Jun 2017, 23:05
Hello VeritasPrepKarishma, Firstly, apologies for asking a clarification on an old post!! I am not able to follow the highlighted part of the solution. I do understand that you have used the successive percentage formula. But unable to understand why is  \((1 + \frac{1}{3})*(1 \frac{1}{5}) = (1 + Profit)\)%? Can you please explain in a bit more detail. Thanks in advance! VeritasPrepKarishma wrote: Acer86 wrote: A merchant purchased a jacket for $60 and then determined a selling price that equalled the purchase price of the jacket plus a markup that was 25 percent of the selling price. During a sale, the merchant discounted the selling price by 20 percent and sold the jacket. What was the merchant’s gross profit on this sale? (A) $0 (B) $3 (C) $4 (D) $12 (E) $15 First of all, the question has very ambiguous language. They have to distinguish between marked price and selling price and they fail to do that. This is what the question needs to change: A merchant purchased a jacket for $60 and then determined a markup price that equaled the purchase price of the jacket plus a markup that was 25 percent of the markup price. During a sale, the merchant discounted the markup price by 20 percent and sold the jacket. What was the merchant’s gross profit on this sale? Here, mark up was 25% of markup price so purchase price was 75% of markup price i.e. purchase price was increased by 33.33% to get mark up price (25 is 33.33% of 75) [ m](1 + Mark Up%) * (1  Discount%)= (1 + Profit%)[/m] \((1 + \frac{1}{3})*(1 \frac{1}{5}) = (1 + Profit%)\) \(Profit% = \frac{1}{15}\) Hence you get a profit of $1 for every $15 of purchase price. Since purchase price is 4*15, profit will be 4.For more on the formula and concept of Mark up, discount, check: http://www.veritasprep.com/blog/2011/02 ... ntprofit/
_________________
My Best is yet to come!



EMPOWERgmat Instructor
Status: GMAT Assassin/CoFounder
Affiliations: EMPOWERgmat
Joined: 19 Dec 2014
Posts: 12436
Location: United States (CA)

Re: A merchant purchased a jacket for $60 and then determined
[#permalink]
Show Tags
06 Mar 2018, 14:53
Hi All, This question is essentially just a "math" question. How you set up the math (and work through the steps) is up to you though (you can use fractions, decimals or percents): Purchase price = $60 Selling price = $60 + 25% of the Final Price Final Price = X $60 + .25X = X $60 = .75X $60 = (3/4)(X) Now, multiply both sides by 4/3 $60(4/3) = (4/3)(3/4)X $240/3 = (12/12)X $80 = X During the sale, the selling price was discounted by 20% $80  20%($80) = Final Selling Price $80  1/5($80) = $80  $16 = $64 The Gross Profit = Final Price  Purchase Price $64  $60 = $4 Final Answer: GMAT assassins aren't born, they're made, Rich
_________________
760+: Learn What GMAT Assassins Do to Score at the Highest Levels Contact Rich at: Rich.C@empowergmat.com
Rich Cohen
CoFounder & GMAT Assassin
Special Offer: Save $75 + GMAT Club Tests Free
Official GMAT Exam Packs + 70 Pt. Improvement Guarantee www.empowergmat.com/
***********************Select EMPOWERgmat Courses now include ALL 6 Official GMAC CATs!***********************




Re: A merchant purchased a jacket for $60 and then determined &nbs
[#permalink]
06 Mar 2018, 14:53



Go to page
1 2
Next
[ 21 posts ]



