Question

A trader purchased 1,000 books at the rate of $5.40 per book and spent $200 towards transportation. If he wants to earn a profit of 12.5%, at what price should he sell each book?

( with explanation )

Answer 1

$6.3

Explanation:

Cost of one book = $5.40

cost of 1000 books = 1000* Cost of one book = $5.40*1000 = $5400

Transportation cost for all the books = $200

Thus, total cost for all the books = cost of 1000 books + Transportation cost for all the books = $5400 + $200 = $5600.

Given , trader wants to earn a profit of 12.5%

thus, we find 12.5 % of total cost incurred by trader

12.5 % of total cost incurred by trader = 12.5/100 * $5600. = $700

Thus, total profit for 1000 books will be $700

we know that

selling price = cost price + profit

therefore, in the given problem

selling price for 1000 books = total cost for 1000 books + total profit

substituting the value as calculated above

selling price for 1000 books = $5600 + $700 = $6300

To find selling price for one book, lets divide LHS and RHS by 1000

selling price for 1000/100 books = $6300/1000 = $6.3

Thus, trader should sell each book at $6.3 to earn a profit of 12.5%.