Profit and loss 32 -10th grade

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The 1st dealer, 2nd dealer and 3rd dealer each make 20% profit in cap-business.
The 3rd dealers buy their stocks from the 2nd dealers. The cost of a cap
at 3rd dealer’s shop is $86.40. What should be its cost at 1st dealer’s shop?

Solution: Suppose, the cost for the 1st dealer is $x

The profit per $100 is $20

So, the profit per $1 is $(20/100) = $1/5

So, the profit per $x is $(1/5)*x = $(x/5)

So, the purchase price of the 2nd dealer = $(x + x/5) = $6x/5

So, again the 2nd dealer sells it to the retailer at a profit of 20%

So, the purchase price of the 3rd dealer = $(120/100 * 6x/5) = $(36x/25)

The 3rd dealer also sells it at a profit 20%

The 3rd dealer’s selling price = $(120/100 * 35x/25) = $(216x/125)

By the problem, 216x/125 = 86.40

=> x = (86.40 * 125) / 216 = 50

So, then cost at 1st dealer’s shop per cap = $50