A certain radio costs a merchant $72. At what price must the merchant

Question

A certain radio costs a merchant $72. At what price must the merchant sell this radio in order to make a profit of 20%?

(A) $86.40

(B) $92

(C) $90

(D) $144

(E) $148

pushpitkc · Answer

If the radio costs the merchant $72, in order to make a profit of 20%,

the merchant would have to sell the radio at 1.2*$72 = $86.40

Therefore, the merchant must sell the radio at  $86.40(Option A)  to make a profit of 20%

EgmatQuantExpert · Answer

Solution

We are given:

• Profit= 20% of cost price
• Cost= $72

We need to find:

• Selling price such that merchant makes a profit of 20%

We know,

• Selling price= Cost price + profit
• Selling price= Cost price+ 20% of cost price
• Selling price= $72+20/100* $72
• Selling price= $72+ 0.2* $72
• Selling price= $72+$14.40
• Selling Price= $86.40

Answer: A

ScottTargetTestPrep · Answer

We can let R = revenue and create the equation:

R - 72 = 0.2(72)

R - 72 = 14.4

R = 86.4

Answer: A

Manasvi1 · Answer

Profit%= 20%
C.P.=$72
Profit= Profit% of C.P.
 = 20/100 * 72
 =  $14.40 
S.P. = C.P. + Profit
 = 72 + 14.40
 =  $86.40 
Hence Option(A)

greenisthecolor · Answer

It seems like a very simple question. Then, the idea should be how quickly one solves this.

Selling price = Cost price + Profit =  72 + \frac{20}{100} = 72 + \frac{1}{5}

Looking at the numbers, we can see we will get a decimal answer if we go through with the calculation. A quick peek at the options show that  only option A has decimal . So that should be the answer.

Is this one of the right approaches to save few precious seconds?

EyeSeaMe · Answer

We can solve this question by using logic and benchmarks -

Cost of the Radio - $72

Using benchmarks to solve this problem -

$72 = 100%

We need to sell the product at 120% of the original cost.

Divide by 10 on both sides to find 10 % of 72

7.2 = 10%

So, 10% + 10% = 7.2 + 7.2 i.e 14.4

Add this 20% to the original $72

72 + 14.4 = 86.4 i.e ANSWER A

We can eliminate a few answers at the start by reasoning out the following - A quick glance at the answers reveals all of 'em to be higher than $72, but the answers are far apart. For example - Answers C & D are double i.e 200% of $72, and we need 20% of $72

A certain radio costs a merchant $72. At what price must the merchant

Prep Toolkit

Top 5 GMAT Debrief Videos

615 to 715 in 15 Days (Ria's Strategies)

More than Quant/Verbal Abilities: Speed vs. Accuracy

745 with Only Self-Prep and GMAT Club

From 555 to 765: 210-point Improvement

Perfect 805 Score Debrief by Julia

My Rewards

GMAT Problem Solving (PS) Questions

A certain radio costs a merchant $72. At what price must the merchant

Prep Toolkit

615 to 715 in 15 Days (Ria's Strategies)

More than Quant/Verbal Abilities: Speed vs. Accuracy

745 with Only Self-Prep and GMAT Club

From 555 to 765: 210-point Improvement

Perfect 805 Score Debrief by Julia

My Rewards