If the selling price of an item is $240 and the profit is 20%, what is the cost

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Question: If the selling price of an item is $240 and the profit is 20%, what is the cost price?

Options:

Correct Answer: $200

Solution:

Let Cost Price = x. Selling Price = x + 0.2x = 1.2x. 1.2x = 240. x = 240/1.2 = $200.

If the selling price of an item is $240 and the profit is 20%, what is the cost price?

If the selling price of an item is $240 and the profit is 20%, what is the cost price?

Step 1: Understand that the selling price is $240.
Step 2: Know that profit is 20%. This means the selling price is 120% of the cost price.
Step 3: Let the cost price be represented as 'x'.
Step 4: Write the equation for selling price: Selling Price = Cost Price + Profit.
Step 5: Since profit is 20% of cost price, we can express it as: Selling Price = x + 0.2x.
Step 6: Combine the terms: Selling Price = 1.2x.
Step 7: Set up the equation: 1.2x = 240.
Step 8: To find 'x', divide both sides of the equation by 1.2: x = 240 / 1.2.
Step 9: Calculate the value: x = 200.
Step 10: Conclude that the cost price is $200.

Profit Calculation – Understanding how to calculate cost price from selling price and profit percentage.
Algebraic Manipulation – Using algebra to solve for the unknown variable (cost price) in an equation.