If a product is sold for $600 at a profit of 20%, what was the cost price?

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Question: If a product is sold for $600 at a profit of 20%, what was the cost price?

Options:

Correct Answer: $480

Solution:

Let Cost Price = x. Selling Price = x + 20% of x = 1.2x. 1.2x = 600. x = 600/1.2 = 500.

If a product is sold for $600 at a profit of 20%, what was the cost price?

If a product is sold for $600 at a profit of 20%, what was the cost price?

Step 1: Understand that the Selling Price (SP) is $600.
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 = 600.
Step 6: Solve for x by dividing both sides by 1.2: x = 600 / 1.2.
Step 7: Calculate the value: x = 500.
Step 8: Conclude that the Cost Price is $500.

Profit Calculation – Understanding how to calculate profit based on selling price and cost price.
Percentage Application – Applying percentage increases to determine the selling price from the cost price.
Algebraic Manipulation – Using algebra to solve for the unknown variable (cost price) in an equation.