Check GMAT Club Decision Tracker for the Latest School Decision Releases https://gmatclub.com/AppTrack

 It is currently 22 May 2017, 19:10

GMAT Club Daily Prep

Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track
Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

Events & Promotions

Events & Promotions in June
Open Detailed Calendar

Show Tags

06 Nov 2010, 14:32
7
This post was
BOOKMARKED
00:00

Difficulty:

55% (hard)

Question Stats:

59% (02:15) correct 41% (01:00) wrong based on 396 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
[Reveal] Spoiler: OA

Last edited by Bunuel on 05 Feb 2012, 14:55, edited 1 time in total.
Edited the question and added the OA
Manager
Joined: 03 Sep 2010
Posts: 75
Location: Israel
GMAT 1: 660 Q47 V34
GMAT 2: 670 Q48 V34
GPA: 3.2
WE: Operations (Non-Profit and Government)
Followers: 3

Kudos [?]: 33 [1] , given: 2

Re: Profit from a Jacket [#permalink]

Show Tags

06 Nov 2010, 14:38
1
This post received
KUDOS
60*1.25=75
75*0.8=60
60-60=0
the answer is A
Math Expert
Joined: 02 Sep 2009
Posts: 38798
Followers: 7714

Kudos [?]: 105782 [9] , given: 11581

Re: Profit from a Jacket [#permalink]

Show Tags

06 Nov 2010, 21:34
9
This post received
KUDOS
Expert's post
5
This post was
BOOKMARKED
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.
_________________
SVP
Joined: 16 Nov 2010
Posts: 1666
Location: United States (IN)
Concentration: Strategy, Technology
Followers: 34

Kudos [?]: 533 [0], given: 36

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: 181
Location: United States (MI)
Concentration: Marketing, General Management
WE: Business Development (Consumer Products)
Followers: 6

Kudos [?]: 69 [0], given: 40

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 $$sp-0.2sp=0.8sp$$ $$0.8sp=0.8*80=64$$ Gross profit = 64-purchase price = 64-60=4 (C) Veritas Prep GMAT Instructor Joined: 16 Oct 2010 Posts: 7368 Location: Pune, India Followers: 2281 Kudos [?]: 15075 [0], given: 224 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 mark-up price that equaled the purchase price of the jacket plus a markup that was 25 percent of the mark-up price. During a sale, the merchant discounted the mark-up price by 20 percent and sold the jacket. What was the merchant’s gross profit on this sale? Here, mark up was 25% of mark-up price so purchase price was 75% of mark-up 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 ... nt-profit/ _________________ Karishma Veritas Prep | GMAT Instructor My Blog Get started with Veritas Prep GMAT On Demand for$199

Veritas Prep Reviews

Director
Joined: 01 Feb 2011
Posts: 755
Followers: 14

Kudos [?]: 124 [0], given: 42

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 Co-Founder Joined: 17 Sep 2011 Posts: 41 Schools: UC Berkeley (Haas) - Class of 2010 Followers: 28 Kudos [?]: 29 [4] , given: 12 Re: percentages [#permalink] Show Tags 11 Dec 2011, 21:50 4 This post received KUDOS Expert's post 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: 228
Followers: 2

Kudos [?]: 21 [2] , given: 14

Re: percentages [#permalink]

Show Tags

11 Dec 2011, 22:38
2
This post received
KUDOS
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 80-16 = 64 $total profit = 64-60 = 4$
Senior Manager
Joined: 18 Sep 2009
Posts: 356
Followers: 3

Kudos [?]: 488 [0], given: 2

Re: percentages [#permalink]

Show Tags

12 Dec 2011, 09:41
1
This post was
BOOKMARKED
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=80-16=64 (selling price after discount)
Gross profit= selling price after discount- cost price.=64-60=4
SVP
Status: The Best Or Nothing
Joined: 27 Dec 2012
Posts: 1857
Location: India
Concentration: General Management, Technology
WE: Information Technology (Computer Software)
Followers: 51

Kudos [?]: 2163 [1] , given: 193

Show Tags

19 Feb 2015, 03:41
Hello from the GMAT Club BumpBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email.
_________________
Manager
Joined: 14 Sep 2014
Posts: 94
WE: Engineering (Consulting)
Followers: 1

Kudos [?]: 29 [0], given: 51

Show Tags

20 Oct 2016, 00:08
Hello from the GMAT Club BumpBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email.
_________________
Senior Manager
Status: DONE!
Joined: 05 Sep 2016
Posts: 409
Followers: 3

Kudos [?]: 16 [0], given: 283

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)

64-60 = $4 profit C. Intern Joined: 03 Sep 2016 Posts: 3 Followers: 0 Kudos [?]: 0 [0], given: 17 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: 38798
Followers: 7714

Kudos [?]: 105782 [0], given: 11581

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 700-level question.

hey, is it possible to send you private message?
Math Expert
Joined: 02 Sep 2009
Posts: 38798
Followers: 7714

Kudos [?]: 105782 [0], given: 11581

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 Woodbury-Stewart Founder and CEO GMAT Quant Self-Study Course 500+ lessons 3000+ practice problems 800+ HD solutions Re: A merchant purchased a jacket for$60 and then determined   [#permalink] 19 May 2017, 06:20
Similar topics Replies Last post
Similar
Topics:
1 A merchant prices a television at 60 percent above wholesale. For a Pr 3 13 May 2017, 04:02
1 Of the people who purchase a house, 60% considers the landscape and 80 3 15 Mar 2017, 16:47
35 An electronics store purchased a CD player at a wholesale price of 60$23 12 Mar 2017, 12:01 3 Merchant Makes A Profit of 20% on Selling Price 4 21 Jan 2017, 01:07 32 A merchant sells an item at a 20% discount, but still makes 17 04 Dec 2016, 21:38 Display posts from previous: Sort by A merchant purchased a jacket for$60 and then determined

 new topic post reply Question banks Downloads My Bookmarks Reviews Important topics

 Powered by phpBB © phpBB Group and phpBB SEO Kindly note that the GMAT® test is a registered trademark of the Graduate Management Admission Council®, and this site has neither been reviewed nor endorsed by GMAC®.