If a product is sold for $120 at a profit of 20%, what was the cost price?

If a product is sold for $120 at a profit of 20%, what was the cost price?

Step 1: Understand that the Selling Price (SP) is $120.
Step 2: Know that the profit is 20%. This means the Selling Price is 120% of the Cost Price (CP).
Step 3: Write the relationship between Selling Price and Cost Price: SP = CP + 20% of CP.
Step 4: Rewrite the equation using 'x' for Cost Price: SP = x + 0.2x = 1.2x.
Step 5: Set up the equation: 1.2x = 120.
Step 6: Solve for x by dividing both sides by 1.2: x = 120 / 1.2.
Step 7: Calculate the value: x = 100.
Step 8: Conclude that the Cost Price is $100.

Profit Calculation – Understanding how to calculate the selling price based on the cost price and profit percentage.
Algebraic Manipulation – Using algebra to solve for the cost price from the selling price and profit.