Question

When sold at a 40% discount, a sweater nets the merchant a 20% profit on the wholesale cost at which he initially purchased the item. By what percent is the sweater marked up from wholesale at its normal retail price?

Answer 1

Answer:

100%

Explanation:

Let the normal retail price of the sweater be 'SP' and the cost price be 'CP'

Therefore,

The selling price = SP - 40% of SP = SP - 0.4SP = 0.6SP

Now,

the profit = 20% of CP = 0.2CP

also,

Profit = Selling Price - Actual price

or

0.2CP = 0.6SP - CP

or

1.2CP = 0.6SP

Or

CP = 0.5SP

or

SP = 2CP

thus,

Increase percentage in sweater marked up from wholesale at its normal retail price

= $\frac{SP-CP}{CP}\times 100$

or

=  $\frac{2CP-CP}{CP}\times 100$

= 100%