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

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

Options:

Correct Answer: $80

Solution:

Let Cost Price = x. Then, 120 = x + 0.2x => 120 = 1.2x => x = 120/1.2 = $100.

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

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

Step 1: Understand that the selling price of the product is $120.
Step 2: Know that the profit is 20% of the cost price.
Step 3: Let the cost price be represented as 'x'.
Step 4: Calculate the profit in terms of 'x': Profit = 20% of x = 0.2x.
Step 5: The selling price is the cost price plus the profit: Selling Price = Cost Price + Profit.
Step 6: Write the equation: 120 = x + 0.2x.
Step 7: Combine like terms: 120 = 1.2x.
Step 8: To find 'x', divide both sides of the equation by 1.2: x = 120 / 1.2.
Step 9: Calculate the value: x = 100.
Step 10: Conclude that the cost price of the product is $100.

Profit Calculation – Understanding how to calculate the cost price from the selling price and profit percentage.
Percentage Increase – Applying the concept of percentage increase to determine the relationship between cost price and selling price.