A public car dealer marked up the cost of a car at 30% in an...

JAMB 2015

A public car dealer marked up the cost of a car at 30% in an attempt to make 20% gross profit. Due to the value of dollar, he now placed 20% discount on the car. What profit or loss will he make?

A. 3%
B. 2%
C. 4%
D. 1%

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Correct Answer: Option C

Explanation

Let assume the cost price is 100%

Marked up price + cost price = 20 + 100 = 120%

Discount at 20% = 20/100 × 120 % of cost price

Selling price = cost price − gain

= (120 − 24)% of cost price

= 96% of cost price

Loss = (100− 96)% of cost price

= 4% of cost price

∴ He will wake 4% loss

There is an explanation video available below.

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