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# M07-33

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Math Expert
Joined: 02 Sep 2009
Posts: 52971

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15 Sep 2014, 23:36
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Difficulty:

45% (medium)

Question Stats:

62% (01:11) correct 38% (00:47) wrong based on 193 sessions

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A shop purchased a pair of sunglasses for $120 and was selling it at a price that equaled the purchase price of the sunglasses plus a markup that was 25 percent of the selling price. After some time a shop owner decided to decrease the selling price by 20 percent. What was the shop's gross profit on this sale? A.$0
B. $2 C.$4
D. $6 E.$8

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15 Sep 2014, 23:36
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Official Solution:

A shop purchased a pair of sunglasses for $120 and was selling it at a price that equaled the purchase price of the sunglasses plus a markup that was 25 percent of the selling price. After some time a shop owner decided to decrease the selling price by 20 percent. What was the shop's gross profit on this sale? A.$0
B. $2 C.$4
D. $6 E.$8

Let the markup be $$x$$, so $$x$$ must be 25% of the selling price, which would be $$120+x$$: $$x=0.25(120+x)$$. Solving gives $$x=40$$. Hence the selling price was $$120+40=160$$.

The price after the discount of 20% would be $$160*0.8=128$$ and the gross profit on the sale would be: final selling price - cost of the sunglasses = $$128 - 120 = 8$$.

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22 Nov 2014, 11:03
hi bunnel,
can you pls explain how the price after discount has come . Especially how 0.8 has come ?
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Joined: 02 Sep 2009
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23 Nov 2014, 06:02
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prashd wrote:
hi bunnel,
can you pls explain how the price after discount has come . Especially how 0.8 has come ?

20% discount from selling price = price - price*0.2 = price(1 - 0.2) = 0.8*price.

Hope it's clear.

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05 Jan 2015, 10:01
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I think this question is poor and helpful.
*selling it at a price that equaled the purchase price of the sunglasses plus a markup that was 25 percent of the selling price.*
This means if CP is 120 then SP = 120+0.25*CP

and by this approach we get ans. 0
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06 Jan 2015, 01:43
sanket1991 wrote:
I think this question is poor and helpful.
*selling it at a price that equaled the purchase price of the sunglasses plus a markup that was 25 percent of the selling price.*
This means if CP is 120 then SP = 120+0.25*CP

and by this approach we get ans. 0

Please read the question and the solution carefully. It should be 120 + 0.25*SP = SP --> SP = 160.
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15 Jan 2015, 16:40
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sanket1991 wrote:
I think this question is poor and helpful.
*selling it at a price that equaled the purchase price of the sunglasses plus a markup that was 25 percent of the selling price.*
This means if CP is 120 then SP = 120+0.25*CP

and by this approach we get ans. 0

Actually, I feel that this question is representative of many of the trickier questions you'd find on the real GMAT ~ one that you need to pay attention to its finer details.

Questions are not posed in the most convenient ways for the test taker --- and when one is stressed and trying to "race" against the clock, it's real easy to miss out on the finer details of a question that "looks" easy.

Cost: 120
Selling Price: SP = 120 + (1/4)SP ---> NOT (1/4 Cost)... SP - (1/4) SP = 120 ... (3/4) SP = 120 ... SP = 160
New Selling Price: NSP = 160 (4/5) ... NSP = 128

Profit = NSP - Cost ----> 128 - 120 = 8

Good question.
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Joined: 10 Aug 2014
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17 Aug 2015, 18:14
Why we calculate discount by multiplying by 0.8 but not dividing by 1.2.
I believe we should have 160/1.2=133.3. Please explain when we divide and when multiply.
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11 Oct 2015, 07:54
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Bunuel wrote:
A shop purchased a pair of sunglasses for $120 and was selling it at a price that equaled the purchase price of the sunglasses plus a markup that was 25 percent of the selling price. After some time a shop owner decided to decrease the selling price by 20 percent. What was the shop's gross profit on this sale? A.$0
B. $2 C.$4
D. $6 E.$8

cost price of glasses is 120$. Let the selling price be x. Selling price=$$120+(\frac{25}{100}*Selling price)$$ Selling price=160 this Selling price is decreased by 20%, so Selling price=$$160(1-(\frac{20}{100}))$$=128 Profit=Selling price-Cost price =128-120 =8 Manager Joined: 17 Mar 2014 Posts: 126 Location: United States Concentration: Entrepreneurship, Leadership GPA: 3.97 Re: M07-33 [#permalink] ### Show Tags 02 Dec 2015, 15:05 Bunuel wrote: A shop purchased a pair of sunglasses for$120 and was selling it at a price that equaled the purchase price of the sunglasses plus a markup that was 25 percent of the selling price. After some time a shop owner decided to decrease the selling price by 20 percent. What was the shop's gross profit on this sale?

A. $0 B.$2
C. $4 D.$6
E. $8 To certain extent - it is confusing. Because "new selling price" should have been mentioned. I tried to solve by SP = 120 + .25 SP ; .75 SP = 120; Then, with the flow of the question I solved further by setting new SP in this equation itself - .75 * .80SP = 120; which produced incorrect result SP = 200 _________________ KUDOS!!!, I need them too Current Student Status: Remember to Always Think Twice Joined: 04 Nov 2014 Posts: 54 Location: India GMAT 1: 740 Q49 V40 GPA: 3.51 Re: M07-33 [#permalink] ### Show Tags 19 Jan 2016, 05:44 1 excellent wordplay in the question will get many confused but, it is lucid. cost price = 120 selling price (SP) = 120 + 0.25*SP --- (this equation is the catch) Hence 0.75*SP = 120 and hence SP = 160 Final SP = 0.8*SP = 0.8*160 = 128. Hence a profit of 8$.
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17 Feb 2016, 12:58
Tricky wording. I should've known answer A was too easy!

"equaled the purchase price of the sunglasses plus a markup that was 25 percent of the selling price." Is two equations.
SellingPrice = 120 + Markup
Markup= 1/4(SellingPrice)

SellingPrice = 120+ (SellingPrice/4) = 3/4SellingPrice = 120 = SellingPrice = $160 160*(4/5) = 128 Profit = Selling - Cost E.$8
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06 Sep 2016, 11:51
I would say nice question... caught me off guard with the wording...
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25 Jul 2017, 18:06
I think this is a high-quality question and I agree with explanation.
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Joined: 07 Sep 2017
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05 Nov 2017, 15:45
I think this is a poor-quality question and the explanation isn't clear enough, please elaborate. 120 * 1.25 =150
25% of 120= 30; 120+30= 150
Not sure how you reached 40%

150*.8=120. The answer would be 0
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Joined: 02 Sep 2009
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05 Nov 2017, 20:13
Rigatoni wrote:
I think this is a poor-quality question and the explanation isn't clear enough, please elaborate. 120 * 1.25 =150
25% of 120= 30; 120+30= 150
Not sure how you reached 40%

150*.8=120. The answer would be 0

Hope it helps.
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30 May 2018, 16:49
Bunuel, are you sure that this is a 700 question?
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04 Nov 2018, 09:18
I still don't understand how $160 is determined as the selling price. Here we have$120 as the cost and 25% markup of the selling price, which is independent? Also in the explanation 120+x120+x: x=0.25(120+x)

How do you treat the x:x? Explanation is confusing
Re: M07-33   [#permalink] 04 Nov 2018, 09:18
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# M07-33

Moderators: chetan2u, Bunuel

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