A wholesaler purchases “n” mobile phones from the manufacturer at a pr

Question

A wholesaler purchases “n” mobile phones from the manufacturer at a price of $120 per mobile and sells them to the retailers at a price of $180 per mobile. Because the payments are made online, the wholesaler needs to pay a transaction charge of 5% while purchasing from the manufacturer and selling to the retailer. What is the profit percentage of the wholesaler after purchasing and selling all the “n” mobile phones?

A) 33.3%
B) 36%
C) 50%
D) 65%
E) 75%

A) 33.3%
B) 36%
C) 50%
D) 65%
E) 75%

Sanjay7392 · Accepted Answer

let n=1

whlesaler pays transaction charges both during his purchase and his selling.

Purchase amount including tr. charges= 120+ 5%= 126

selling amount including transaction charges= 180 - 5% = 171 (since he loses 5% because of transaction)

(171-126)/126 = 45/126 = 5/14 = 0.357 ~ 0.36 ---->36%

PriyankaPalit7 · Answer

I have one doubt in this question.

The seller need to pay an additional 5% as online transaction charge for selling to the retailer.
Why can't we add this transaction changer to the cost price of the mobile phones and make the effective cost price $126n + 9n, instead of deducting from the sales price and calculating an effecting sales price of $171 - 5% transaction charge?

sandeep211986 · Answer

TarPhi · Answer

The wholesaler pays transaction charges both during his purchase and his selling.

Therefore, the Cost Price including tr. charges = 120 + 5% of 120 = 126

And the Selling Price including transaction charges = 180
Therfore, SP excluding transaction charges = 180 - 5% of 180 = 171

(171-126)/126 = 45/126 = 0.357 ~ 0.36
Answer is B

Please Kudos

KarishmaB · Answer

Total Cost Price = 120 + 5% of 120 = 120 + (1/20)*120 = 126

Net Selling Price = 180 - 5% of 180 = 180 - (1/20)*180 = 171

Profit % = (171 - 126)/126 * 100 = 45/126 * 100 = 36%

Answer (B)

Stanindaw · Answer

Will the actual GMAT have options rounded up?

Vordhosbn · Answer

Yikes, poorly worded question.

whatsarc · Answer

I think the question should have the word "approximately".

princevora · Answer

he has to pay a 5% of 120 and 5% of 180 i.e 6+9 = $15.

It is mentioned that he sells it at $ 180. so SP = 180

Now CP = 120 + 15 = 135

so profit = 180-135 = 45.

profit % = 45/135 = 1/3 = 33.33

please explain the flaw in the solution.

whatsarc · Answer

Wholesaler pays 120+6 =126 (pays 120 plus 5%) 
After selling he gets 180-9 = 171 (receives 180 but pays 5%)

So effective cost is 126 and effective revenue is 171 with profit of 45

​​​​​​
171-126/126 = 45/126 ≈ 36%

​​​​​

onlymalapink · Answer

how am I supposed to know thebtransactikn isnt one continuous charge ignoring that how am I supposed to know 180 contains transaction tax no it doesnt seem to be implied at all if we go by that logic nothing I ls stopping me from assuming 120 includes tax too.

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A wholesaler purchases “n” mobile phones from the manufacturer at a pr

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A wholesaler purchases “n” mobile phones from the manufacturer at a pr

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