A product is sold for $120 after a profit of 20%. What was the cost price?

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Question: A product is sold for $120 after a profit of 20%. What was the cost price?

Options:

Correct Answer: $90

Solution:

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

A product is sold for $120 after a profit of 20%. What was the cost price?

A product is sold for $120 after a profit of 20%. What was the cost price?

Step 1: Understand that the selling price of the product is $120.
Step 2: Know that a profit of 20% means the selling price is 120% of the cost price.
Step 3: Let the cost price be represented by '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: Set up 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 is $100.

Profit Calculation – Understanding how to calculate the selling price based on the cost price and profit percentage.
Algebraic Manipulation – Using algebra to isolate variables and solve for the cost price.