If a person earns a profit of 20% on selling a watch for $120, what was the cost

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Question: If a person earns a profit of 20% on selling a watch for $120, what was the cost price of the watch?

Options:

Correct Answer: $100

Solution:

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

If a person earns a profit of 20% on selling a watch for $120, what was the cost price of the watch?

If a person earns a profit of 20% on selling a watch for $120, what was the cost price of the watch?

Step 1: Understand that the selling price of the watch is $120.
Step 2: Know that the profit is 20%. This means the selling price is 120% of the cost price.
Step 3: Let the cost price be represented as 'x'.
Step 4: Write the equation for the selling price: Selling Price = Cost Price + Profit.
Step 5: Since the profit is 20% of the cost price, we can express it as: Selling Price = x + 0.2x.
Step 6: Combine the terms: Selling Price = 1.2x.
Step 7: Substitute the selling price into the equation: 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 watch is $100.

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