A trader sells widgets at a $120 each, which is 20% more than they cost from wholesales. How much is his gross profit?

Question

A trader sells widgets at a  $120 each, which is 20% more than they cost from wholesales. How much gross profit does the retailer earn after selling 8 widgets  
    
  A. $140  
    
  B. $148  
    
  C. $160  
    
  D. $172  
    
  E. $176  
    
  Can anyone help me on this one? #examsprep

Vijaya Lakshmi K · Answer

Hello Pallavi,

The answer is option C.
First figure out what the retailer pays for a widget. Call this price x.
We're told that 120 is twenty percent more that what the retailer paid for a widget. That is, 120 is equal to x plus twenty percent of x. Since twenty percent of x is 0.2x, this gives us the equation
120=x+0.2x
=> 120=1.2x
Solving this equation gives x=100 dollars.

So, the retailer pays 100 dollars for a widget and sells it for 120 dollars; thus the retailer makes a twenty dollar profit for each widget sold.
So if he sells eight widgets, then his total profit is 20*8 = 160$.

Hope this helps. All the Best.