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# A used-car dealer sold one car at a profit of 25% of the

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Intern
Joined: 17 Apr 2007
Posts: 24
A used-car dealer sold one car at a profit of 25% of the [#permalink]

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12 May 2007, 15:12
This topic is locked. If you want to discuss this question please re-post it in the respective forum.

A used-car dealer sold one car at a profit of 25% of the dealer's purchase price for that car and sold another car at a loss of 20% of the dealer's purchase price for that car. If the dealer sold each car for \$20,000, what was the dealer's total profit or loss, in dollars, for the two transactions combined?

a. 1000 profit
b. 2000 profit
c. 1000 loss
d. 2000 loss
e. 3334 loss

OA is C
Senior Manager
Joined: 03 May 2007
Posts: 270

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12 May 2007, 15:18
how did you get 1000 loss?
I got 1000 profit for an answer.
Intern
Joined: 17 Apr 2007
Posts: 24

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12 May 2007, 15:23
i dont even know how to do the problem...could someone please explain?
Senior Manager
Joined: 03 May 2007
Posts: 270

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12 May 2007, 15:30
I don't know if it's a trick-problem (at least to me it looks like a normal problem).

Ok, there are two cars 20K each. First transaction 25% profit (20,000*0.25=5,000). Second transaction 20% loss (20,000*0.2=4,000)
After two transactions we get 5000profit-4000loss=1000profit
Intern
Joined: 17 Apr 2007
Posts: 24

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12 May 2007, 15:49
but it should be 25% of the dealer's purchase price. 20,000 is the amount the dealer sold the car for. isnt that 2 different things?
Senior Manager
Joined: 03 May 2007
Posts: 270

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12 May 2007, 15:58
Ok, I get it now.

X-original price of the car
then

First transaction X*1.25=20,000 X=20000/1.25 then the original price of the car is 16000. profit is 4000

Second transaction X*(1-0.2)=20000 X=20000/0.8 then the original price of the car is 25000. loss is 5000

so the difference is 1000loss

p.s. thanks for correcting me, I need to pay more attention
12 May 2007, 15:58
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