A Used Car Dealer Sold One Car at a Profit of 25 Percent GMAT Problem Solving

bySayantani Barman Experta en el extranjero

Question: A used car dealer sold one car at a profit of 25 percent of the dealers purchase price for that car and sold another car at a loss of 20 percent of the dealers price for that car. If the dealer sold each car for $20,000, what was the dealers total profit or loss, in dollars, for the two transactions combined?

1000 profit
2000 profit
1000 loss
2000 loss
3334 loss

Solution and Explanation:

Approach Solution (1):

Car 1:
P1 * 1.25 = 20000
P1 = 16000

Car 2:
P2 * 0.8 = 20000
P2 = 25000
P1 + P2 = 25000 + 16000
P1 + P2 = 41000

Final sale: 40000
Total loss = 41000 – 40000 = 1000 loss

Correct Option: C

Approach Solution (2):

A dealer sold one car at a profit of 25% of the dealers purchase price for that car, let’s say P1, for $20,000
P1 * 1.25 = 20,000
P1 = 16,000
Profit = Selling price – Purchase price = 20,000 – 16,000 = 4,000
A dealer sold another car at a loss of 20% of the dealers purchase price for that car, let’s say P2, again for $20,000
P2 * 0.8 = 20,000
P2 = 25,000
Loss = Purchase price – Selling price = 25,000 – 20,000 = 5,000
Overall loss = 5,000 – 4,000 = 1,000

Correct Option: C

Approach Solution (3):

Car 1: Profit of 25% i.e., ¼ i.e., 1 part profit for 4 parts of the cost price
So the selling price ($20,000) has total parts 5 (each being $4,000) out of which 1 part is profit i.e., $4,000
Car 2: Loss of 20% i.e., 1/5 i.e., 1 part of loss out of 5 parts of cost price was removed to get selling price ($20,000) which has 4 parts now. So each part is $5,000 and the loss is 1 part i.e., $5,000.
Overall loss of $5,000 - $4,000 = $1,000

Correct Option: C

“A used car dealer sold one car at a profit of 25 percent of the dealers purchase price for that car and sold another car at a loss of 20 percent of the dealers price for that car. If the dealer sold each car for $20,000, what was the dealers total profit or loss, in dollars, for the two transactions combined?”- is a topic of the GMAT Quantitative reasoning section of GMAT. This question has been taken from the book “GMAT Official Guide Quantitative Review”. To solve GMAT Problem Solving questions a student must have knowledge about a good amount of qualitative skills. The GMAT Quant topic in the problem-solving part requires calculative mathematical problems that should be solved with proper mathematical knowledge.

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A Used Car Dealer Sold One Car at a Profit of 25 Percent GMAT Problem Solving

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