Question

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?

Answer 1

Answer:

Gross profit will be $4

Explanation:

We have given that merchant purchased a jacket for $60

So purchased price = $60

Let the markup price is x

Now according to question selling price = x+60

Now it is given that marked up price is 25 % of the selling price

So $x=(x+60)\times \frac{25}{100}$

X = 20

So selling price = 60+20 =80

Now there is discount of 20%

So price after discount = $80-\frac{80\times 20}{100}= 64$

So gross profit = $64 -$60 = 4