posted by Michelle on .
A merchant buys cloth at $1.60 per yard. At what price per yard should he list the cloth so that he may sell it at a discount of 20% from the list price and still make a profit of 20% of the SALE PRICE?
If she makes 20% off the sale price, then 80% of the sale price is his cost.
So first find the sale price, s:
80% : $1.60
100% : s
Use cross multiplication to solve for s:
Since the sale price was after 20% discount, so again it is 80% of the list price. To calculate the list price L, we use proportions and cross multiplications:
80% : $2.00
100 : L