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# PS-Discount/Marked price

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01 Sep 2004, 19:26
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hi guyz,

Kicking off with my first post to the club on PS-
Would try to contribute henceforth on regular basis-
Here we go-

A trader allows a discount of 5% for cash payment. How much % above the cost price must he mark his goods to make a profit of 10% ?

Am not sure if such Q's crop up in the gmat but thought of posting it ..!!!

Raja
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01 Sep 2004, 19:45
Assuming original cost is n

discount of 5% means selling price is now 0.95n
To make a profit of 10%, (selling price - cost price)/cost price *100% = 10%
Assuming we are marking up the cost price by y%, so

((1+y)n - n)/n = 0.1
n+ny-n/n = 0.1
y = 0.1 = 10%
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01 Sep 2004, 21:58
ywilfred, if u sell for 10% more price (say $110 for a$100 item), then the 5% discount on top of this would bring your profit down from 10%.

Let Y be the % to increase the SP to get 10% profit with 5% discount.
Let CP = 100

CP = 100
SP = 100+Y
Discounted SP = (95/100)(100+y)

To get an effective 10% profit,
(95/100)(100+y) - 100 = 10
y = 15.6%
He should mark up his price by 15.6%, so that after 5% cash discount, he gets an effective 10% profit.
GMAT Club Legend
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02 Sep 2004, 01:23
Let me solve it another way to confirm, I'll use the famous number substitution

Cost price = $100 Marked up by x%, so needs to mark up by (x/100)*100 =$x
SO marked up price is \$(x+100)
If cash payment is made, 5% discount, so selling price is 0.95(x+100)

% Profit = (selling price-cost price)/cost price *100%
10% = (0.95x+95 - 100)/100 * 100%
(0.95x - 5)/100 = 0.1
0.95x = 15
x = 15.7%
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02 Sep 2004, 08:50
110*105/100 = 115.5. so 15.5 accorrding to me.[/b]
02 Sep 2004, 08:50
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