A shopkeeper sells an item for $240 after a profit of 20%. What was the cost pri

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Question: A shopkeeper sells an item for $240 after a profit of 20%. What was the cost price?

Options:

Correct Answer: $200

Solution:

Let Cost Price = x. Selling Price = x + 20% of x = 1.2x. Therefore, 1.2x = 240. x = 240/1.2 = 200.

A shopkeeper sells an item for $240 after a profit of 20%. What was the cost price?

A shopkeeper sells an item for $240 after a profit of 20%. What was the cost price?

Step 1: Understand that the Selling Price (SP) is $240.
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 CP: SP = CP + 0.2 * CP = 1.2 * CP.
Step 5: Substitute the Selling Price into the equation: 1.2 * CP = 240.
Step 6: To find CP, divide both sides of the equation by 1.2: CP = 240 / 1.2.
Step 7: Calculate the value: CP = 200.

Profit Calculation – Understanding how to calculate the cost price from the selling price and profit percentage.
Percentage Application – Applying percentage increase to determine the selling price based on the cost price.