A merchant purchased a jacket for $60 and then determined a selling price that equaled the purchase price of the jacket plus a markup that was 25 percent of the selling price. During a sale, the merchant discounted the selling price by 20 percent and sold the jacket. What was the merchant’s gross profit on this sale?

(A) $0
(B) $3
(C) $4
(D) $12
(E) $15

Highlight to see answer: C

Please post your explanations in the comments below!

One Response to “Jacket Discount”

Ivan says:

purchase= $60 Selling price = S

Sell price= $60+(1/4S)

S= $60+ 1/4S –> S – 1/4S = $60 –> 3/4S = $60 so S= $80

20% of $80 is $16 and discounted price is $64 so gross profit of $64-$60= $4 and the answer is C.

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