# GMAT Math Questions | Profit Loss Q12

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The given question is a GMAT 650 level problem solving question from the topic Profit, Loss & Discounts. This GMAT quant question tests the concept of computing percentage profit when sold at a discount to the marked price.

Question 12: By selling an article at 80% of its marked price, a merchant makes a loss of 12%. What % profit will the merchant make if the article is sold at 95% of its marked price?

1. 5% profit
2. 1% loss
3. 10% profit
4. 5.5% profit
5. 4.5% profit

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### Explanatory Answer | GMAT Profit Loss Q12

#### Approach: Assume cost price to be $100 Let the marked price be S and the cost price of the article be$100.

When the article is sold at 80% of its marked price, selling price is 0.8S.
Selling the article at 0.8S results in a loss of 12% of the cost price.
Therefore, the loss incurred when selling at 0.8S = 12% of 100 = $12. Hence, when selling at 80% of the marked price, the article is sold at 100 − 12 =$88.
i.e., 0.8S = $88. or S = $$frac{88}{0.8}\\$ =$110. If the merchant sells at 95% of the marked price, then the new selling price of the article is 95% of $110 =$104.5 The profit made = 95% of Selling Price − Cost Price = 104.5 − 100 = 4.5. % Profit = $\frac{\text{profit}}{\text{cost price}} = \frac{4.5}{100}\\$ = 4.5% The merchant made 4.5% profit ##### Choice E 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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