A merchant purchased a jacket for $60 and then determined a selling pr

60*1.25=75
75*0.8=60
60-60=0
the answer is A

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

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.

Let selling price = x
So, x = 60 + 25x/100
Calculating above, x = 80
Selling price = 80

20% Discount on Selling price = 64
So, profit = 64-60 = 4 Answer = C

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.

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

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

Let x = the SELLING PRICE

A merchant purchased a jacket for $60 and then determined a selling price that equaled the purchase price of the jacket plus a markup that was 25 percent of the selling price.
We can write: x = $60 + (25% of x)
In other words, x = $60 + 0.25x)
Subtract 0.25x from both sides to get: 0.75x = 60
Divide both sides by 0.75 to get: x = 80
So the selling price is $80

During a sale, the merchant discounted the selling price by 20 percent and sold the jacket.
We can write: DISCOUNTED price = $80 - (20% of $80)
= $80 - (0.20)($80)
= $80 - $16
= $64

What was the merchant's gross profit on this sale?
Gross profit = $64 - $60 = $4

Answer: C

Cheers,
Brent

CP = $60

SP = 60 + MP

MP = 0.25(60 + MP)
Solve to get MP = 20

Therefore, SP = 60 + 20 = 80

NEW SP = 0.80(80) = 64

Profit = 64 - 60 = 4

Answer - C

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