If the profit on selling a bicycle for $240 is 20%, what was the cost price?

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Question: If the profit on selling a bicycle for $240 is 20%, what was the cost price?

Options:

Correct Answer: $200

Solution:

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

If the profit on selling a bicycle for $240 is 20%, what was the cost price?

If the profit on selling a bicycle for $240 is 20%, what was the cost price?

Step 1: Understand that the Selling Price (SP) is $240.
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 + Profit.
Step 4: Since Profit is 20% of CP, we can express it as: Profit = 0.2 * CP.
Step 5: Therefore, Selling Price can be written as: SP = CP + 0.2 * CP = 1.2 * CP.
Step 6: Substitute the Selling Price into the equation: 1.2 * CP = 240.
Step 7: To find CP, divide both sides by 1.2: CP = 240 / 1.2.
Step 8: Calculate the Cost Price: CP = 200.

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