A Wholesaler Purchases “n” Mobile Phones from the Manufacturer at a Price GMAT Problem Solving

Question: A wholesaler purchases “n” mobile phones from the manufacturer at a price of $120 per mobile and sells them to the retailer at a price of $180 per mobile. Because the payments are made online, the wholesaler needs to pay a transaction charge of 5% while purchasing from the manufacturer and selling to the retailer. What is the profit percentage of the wholesaler after purchasing and selling all the “n” mobile phones?

1. 33.3%
2. 36%
3. 50%
4. 65%
5. 75%

“A synchronized diving competition will feature 25 synchronized jumps of 2 divers each. At a minimum, how many divers are needed to ensure that each of the 25 jumps features a different combination of divers?”- 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.

Answer: B

Solutions and Explanation

Approach Solution (1):

Let n = 1

Wholesaler pays transaction charges both during his purchase and his selling

Purchase amount including transaction charges = 120 + 5% = 126

Selling amount including tr. charges = 180 – 5% = 171 (since he loses 5% because of transaction)

(171 – 126) / 126 = 45/126 = 5/14 = 0.357 = 0.36 approx = 36%

Correct Option: B

Approach Solution (2):

Total cost price = 120 + 5% of 120 = 120 + (1/20) * 120 = 126

Net selling price = 180 – 5% of 180 = 180 – (1/20) * 180 = 171

Profit % = (171 – 126)/126 * 100 = 45/126 * 100 = 36%

Correct Option: B

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