# GMAT Quant Practice | Profit & Discounts Q14

###### GMAT Sample Questions | Percentages Profit Loss Word Problem GMAT Sample Questions

The given question is a GMAT 550 level problem solving question in Profit & Loss. This GMAT sample question tests the concept of computing profit percent made after offering a discount on the marked price.

Question 14: A merchant who marked his goods up by 50% subsequently offered a discount of 20% on the marked price. What is the percentage profit that the merchant make after offering the discount?

1. 30%
2. 125%
3. 25%
4. 20%
5. 16.66%

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### Explanatory Answer | GMAT Profit Loss Q14

#### Step 1 : Assume cost price and find marked price

Approach: Assume cost price as $100. Let the cost price of the goods to be$ 100.
The merchant marks his goods up by 50%.
Therefore, his marked price = cost price + mark up.
Marked price = $100 + 50% of$100 = 100 + 50 = $150. #### Step 2 : Find the discount offered and Selling price The merchant offers a discount of 20% on the marked price. Discount offered = 20% of 150 =$30.
Therefore, the goods are finally sold at $150 −$30 = $120. Cost price is$100 and final selling price is $120. Therefore, profit made =$20 on the cost price of \$ 100.
Hence, % profit = $$frac{\text{profit}}{\text{cost price}}\\$ × 100 = $\frac{20}{100}\\$ × 100 = 20%. Merchant made a profit of 20% ##### Choice D is the correct answer. ###### GMAT Online Course - QuantTry it free! Register in 2 easy steps and Start learning in 5 minutes! ###### Already have an Account? ###### GMAT Live Online Classes Next Batch Dec 3, 2020 ###### GMAT Coaching in Chennai Next Integrated$Online + Offline) Batch
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