Question

A particular style of watch costs the retailer $85 per watch. At what price should the retailer mark them so he can sell them at a 15% discount off the original price and

still make 25 % profit on his cost ?

Answer 1

Let x be the market price.

We know that we want a profit of 25% of the original cost, this means that we need a profit of:

`0.25\cdot85=21.25`

Now, if we make a discount of 15% to the market price this means that the selling price will be:

`(1-0.15)x=0.85x`

But we need this to be equal to the profit plus the retailer price, then we want:

`\begin{gathered} 0.85x=21.25+85 \\ 0.85x=106.25 \end{gathered}`

Solving for x we have:

`\begin{gathered} 0.85x=106.25 \\ x=(106.25)/(0.85) \\ x=125 \end{gathered}`

Therefore, the mark price is $125