Problem:
A merchant buys goods at 25% off the list price. He desires to mark the goods so that he can give a discount of 20% on the marked price and still clear a profit of 25% on the selling price. What per cent of the list price must he mark the goods?
Answer Choices:
A. 125%
B. 100%
C. 120%
D. 80%
E. 75%
Solution:
Let L be the list price, M be the marked price, C be the cost, and S be the selling price.
The relationships are:
- C=43L
- S=54M
- Profit=41S
Using the formula S=C+Profit:
S43S43(54M)53MMLM=C+41S=C=43L=43L=35⋅43L=45=1.25=125%
Therefore, the marked price must be 125% of the list price.