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PS1000 Sec7#20

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Manager
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19 Apr 2009, 21:08
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This is simple but I can't seem to get around this one. Especially with "determined a selling price that equaled the purchase price of the jacket plus a markup that was 25 percent of the selling price". Appreciate if someone could explain.

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. 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
Manager
Joined: 12 Apr 2009
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20 Apr 2009, 19:36
joyseychow wrote:
This is simple but I can't seem to get around this one. Especially with "determined a selling price that equaled the purchase price of the jacket plus a markup that was 25 percent of the selling price". Appreciate if someone could explain.

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. 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

the equation for "a selling price that equaled the purchase price of the jacket plus a markup that was 25 percent of the selling price"

Selling Price = S
S= (purchase price) + 25/100(S)
S= 60 + 0.25S
0.75S = 60
s= 80

At the sale new selling price = 0.8S (20% less than original selling price)

Therefore new sale price is = (0.8)60 = 64

therefore gross profit is 64 - 60 = 4.

C. (its better/faster to work with fractions and you don't really need to solve for S - just compute the final figure and then deduct)

OA?
_________________

-talent is the desire to practice-

Manager
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22 Apr 2009, 08:53
joyseychow wrote:
This is simple but I can't seem to get around this one. Especially with "determined a selling price that equaled the purchase price of the jacket plus a markup that was 25 percent of the selling price". Appreciate if someone could explain.

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. 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

cost price=$60 let Selling price=y y=$60+ .25y
y=$80 Now discount =.20y So.. the actual selling price= .80*$80 = $64 So, profit =$4

Manager
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27 Apr 2009, 00:02
Thanks to both of you!! It's that simple. Guess I over read the ques till I got confused.

OA is \$4 (C)
Re: PS1000 Sec7#20   [#permalink] 27 Apr 2009, 00:02
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