A shopkeeper sells a shirt for $30, which is a 20% profit on the cost price. Wha

A shopkeeper sells a shirt for $30, which is a 20% profit on the cost price. What is the cost price of the shirt?

A shopkeeper sells a shirt for $30, which is a 20% profit on the cost price. What is the cost price of the shirt?

Step 1: Understand that the selling price of the shirt is $30.
Step 2: Know that the selling price includes a profit of 20% on the cost price.
Step 3: Recognize that if the cost price is 'x', then the selling price is 120% of 'x'.
Step 4: Write the equation for the selling price: 1.2 * x = 30.
Step 5: To find 'x', divide both sides of the equation by 1.2: x = 30 / 1.2.
Step 6: Calculate 30 divided by 1.2, which equals 25.
Step 7: Conclude that the cost price of the shirt is $25.

Profit Calculation – Understanding how to calculate profit based on selling price and cost price.
Percentage Conversion – Converting percentage profit into a decimal to find the relationship between selling price and cost price.