A wholesaler sells a product to a retailer for $200, which is a 20% profit on th

A wholesaler sells a product to a retailer for $200, which is a 20% profit on the cost price. What is the cost price of the product?

A wholesaler sells a product to a retailer for $200, which is a 20% profit on the cost price. What is the cost price of the product?

Step 1: Understand that the wholesaler sells the product for $200, which includes a profit.
Step 2: Recognize that the profit is 20% of the cost price.
Step 3: Let the cost price be represented by 'x'.
Step 4: Calculate the selling price using the formula: Selling Price = Cost Price + Profit.
Step 5: Since the profit is 20% of the cost price, we can write it as: Profit = 20% of x = 0.2x.
Step 6: Substitute the profit into the selling price formula: Selling Price = x + 0.2x.
Step 7: Combine the terms: Selling Price = 1.2x.
Step 8: Set the selling price equal to $200: 1.2x = 200.
Step 9: To find 'x', divide both sides of the equation by 1.2: x = 200 / 1.2.
Step 10: Calculate the value: x = 166.67.

Profit Calculation – Understanding how to calculate profit based on cost price and selling price.
Percentage Application – Applying percentage increases to determine final values.
Algebraic Manipulation – Using algebra to solve for unknown variables in equations.