A shopkeeper sells an item for $120, making a profit of 20%. What was the cost p

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Question: A shopkeeper sells an item for $120, making a profit of 20%. What was the cost price?

Options:

Correct Answer: $80

Solution:

Let cost price be x. Then, 120 = x + 0.2x => 120 = 1.2x => x = 100.

A shopkeeper sells an item for $120, making a profit of 20%. What was the cost price?

A shopkeeper sells an item for $120, making a profit of 20%. What was the cost price?

Step 1: Understand that the selling price of the item is $120.
Step 2: Know that the profit made is 20% of the cost price.
Step 3: Let the cost price be represented by 'x'.
Step 4: Calculate the profit in terms of 'x'. Since profit is 20% of 'x', it can be written as 0.2x.
Step 5: The selling price is the cost price plus the profit. So, we can write the equation: 120 = x + 0.2x.
Step 6: Combine the terms on the right side of the equation: 120 = 1.2x.
Step 7: To find 'x', divide both sides of the equation by 1.2: x = 120 / 1.2.
Step 8: Calculate the value: x = 100.

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