A company sold goods worth $5000 at a profit of 20%. What is the profit amount?

A company sold goods worth $5000 at a profit of 20%. What is the profit amount?

Step 1: Understand that the company sold goods for $5000.
Step 2: Know that the profit percentage is 20%.
Step 3: Convert the profit percentage into a decimal by dividing by 100. So, 20% becomes 0.20.
Step 4: To find the cost price (CP), use the formula: CP = Selling Price / (1 + Profit Percentage).
Step 5: Substitute the values into the formula: CP = 5000 / (1 + 0.20).
Step 6: Calculate (1 + 0.20) which equals 1.20.
Step 7: Now calculate CP: CP = 5000 / 1.20 = 4166.67.
Step 8: To find the profit amount, use the formula: Profit = Selling Price - Cost Price.
Step 9: Substitute the values: Profit = 5000 - 4166.67.
Step 10: Calculate the profit: Profit = 833.33.
Step 11: Round the profit amount to the nearest hundred, which is $800.

Profit Calculation – Understanding how to calculate profit based on selling price and cost price.
Percentage Application – Applying percentage increases to determine cost price from selling price.