Examkin

Question

Difficulty: MediumFinancial Mathematics (Interest, Profit, Loss, and Depreciation)

A merchant bought a power generator for ₦120,000\text{₦}120,000 and sold it to a retailer at a profit of 20%20\%. The retailer later sold the generator to a customer at a loss of 15%15\%. How much did the customer pay for the generator?

  1. ₦122,400\text{₦}122,400Answer
  2. B
    ₦126,000\text{₦}126,000
  3. C
    ₦110,400\text{₦}110,400
  4. D
    ₦144,000\text{₦}144,000

Answer

The customer paid ₦122,400\text{₦}122,400 for the generator.
The merchant sells the generator for 120%120\% of ₦120,000\text{₦}120,000, which equals ₦144,000\text{₦}144,000. The retailer then sells it at 85%85\% of ₦144,000\text{₦}144,000, yielding ₦122,400\text{₦}122,400.

Step-by-Step Solution

1
Calculate the selling price of the generator from the merchant to the retailer.
Selling Price1=₦120,000×(1+20100)=₦120,000×1.20=₦144,000\text{Selling Price}_1 = \text{₦}120,000 \times \left(1 + \frac{20}{100}\right) = \text{₦}120,000 \times 1.20 = \text{₦}144,000
The merchant makes a 20%20\% profit on the initial cost price of ₦120,000\text{₦}120,000.
2
Calculate the selling price from the retailer to the final customer.
Selling Price2=₦144,000×(1−15100)=₦144,000×0.85=₦122,400\text{Selling Price}_2 = \text{₦}144,000 \times \left(1 - \frac{15}{100}\right) = \text{₦}144,000 \times 0.85 = \text{₦}122,400
The retailer incurs a 15%15\% loss calculated relative to their purchase price of ₦144,000\text{₦}144,000.

Key Concept

Successive Percentage Profit and Loss
Rate this question

Topics

Financial Mathematics (Interest, Profit, Loss, and Depreciation)

More questions from this topic