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

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

Options:

Correct Answer: $100

Solution:

Let Cost Price = x. Selling Price = x + 20% of x = 1.2x. 1.2x = 120. x = 120/1.2 = 100.

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

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

Step 1: Understand that the Selling Price (SP) is $120.
Step 2: Know that the profit is 20% 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: Substitute the Profit into the equation: SP = CP + 0.2 * CP.
Step 6: Combine the terms: SP = 1.2 * CP.
Step 7: Set the Selling Price equal to $120: 1.2 * CP = 120.
Step 8: To find CP, divide both sides by 1.2: CP = 120 / 1.2.
Step 9: Calculate the Cost Price: CP = 100.

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