A vendor sells tool chests at a flea market for $72. If she makes a profit of 20% on each unit sold, what does she pay the manufacturer for each tool chest? ( Hint: The retail price = the wholesale price + the markup.)
A) $64
B) $56
C) $60
D) $ 57
E) $63

Question

A vendor sells tool chests at a flea market for $72. If she makes a profit of 20% on each unit sold, what does she pay the manufacturer for each tool chest? ( Hint: The retail price = the wholesale price + the markup.)
A) $64
B) $56
C) $60
D) $ 57 
E) $63

Quizplus · Accepted Answer

Let x be the wholesale price.
Markup = 20% of x
Retail price = $72
According to the hint, we have:

Retail price = Wholesale price + Markup
$72 = x + 0.2x
$72 = 1.2x
x = $60

Therefore, the vendor pays the manufacturer $60 for each tool chest.

The answer is choice C, $60.

A Vendor Sells Tool Chests at a Flea Market for $72