QUESTION: Mr Bowman sold a carriage for $240, and thereby cleared 1/8 of this amount; what per cent would he have gained if he had sold it for $280?
TEXTBOOK ANSWER: Mr Bowman cleared 1/8 of $240, or $30, and the carriage cost $240 - $30, or $210. If he had sold the carriage at $280, he would have gained $70 on £210 which are ¼ of the cost, or 25%.
Now I think this is wrong. I think the correct answer is 1/3 or $33 1/3 %. Although $70 is 25% of $280, that was not the original price. The original price was $210 so the gain was $70 on $210 which would be 1/3 or 33 1/3 %.
So have I caught the book out here? Who is right, me or the book?
Many thanks.
2006-09-03 00:34:52 · 5 answers · asked by paulmurphy42 1 in Science & Mathematics ➔ Mathematics
The text clearly asked "what percent would he have GAINED" not what percent of the selling price. The example showed what fraction of the selling price he cleared as profit - 12.5% (1/8), not the percent gained, which was 14.3% (1/7). Going from this, the answer you have some up with is the correct one, and you should point it out to your teacher. I only hope he is open-minded enough to trust the math, and not the textbook.
2006-09-03 02:27:42 · answer #1 · answered by Matt H 1 · 0⤊ 0⤋
I think u r right. The original CP (cost price) of the carriage is 210. Which means he's gonna earn profit on 210 nd not 280. So 70/210*100 = 33 1/3 %. SO i feel u r correct.
2006-09-03 08:06:47 · answer #2 · answered by Jack D 1 · 0⤊ 0⤋
You know what, I think you are right, the way you are looking at it, which seems sensible to me!
Had they asked, "Selling it for $280, what percentage of the selling price represents gain?", it would be 25%. But you have made a very good case for 33.3%, based on Bowman's original cost.
I think your teacher will be proud of you! Extra credit! and moreso if you write a polite letter on the matter to the publisher!
2006-09-03 07:43:32 · answer #3 · answered by catintrepid 5 · 0⤊ 1⤋
You are confusing yourself between a very common mistake done even by many finance professionals!! You are confusing between profit and margin.
When you calculate profit, do you calculate it on cost or selling price??
In real life, also as given in your book, you calculate profit over the selling price and not on the cost price.
A certain %age over cost is the margin (which you have calculated)
2006-09-03 07:44:57 · answer #4 · answered by DG 3 · 0⤊ 0⤋
The question they are asking, one ust assume, is
"what percent of the selling price is profit."
2006-09-03 07:51:11 · answer #5 · answered by bob h 3 · 0⤊ 0⤋