A trader sold an article for N150 and made a profit of 20%. What was the cost price of the article

Question

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Answer 1

Let's start with the formula for calculating profit:

Profit = Selling Price - Cost Price

We know the selling price is N150 and the profit is 20% of the cost price. So we can set up the equation:

0.2x = Selling Price - Cost Price
0.2x = N150 - Cost Price

Now we can substitute the given profit margin percentage into the equation:

0.2x = 0.20x

So we have:

0.2x = N150 - Cost Price
0.20x = Cost Price

Now we can solve for the cost price:

0.20x = Cost Price
x = Cost Price / 0.20

x = 750

Therefore, the cost price of the article was N750.

To verify our answer, we can calculate the profit:

Profit = Selling Price - Cost Price
Profit = N150 - N750
Profit = N-600

Now we can calculate the profit margin percentage:

Profit Margin Percentage = (Profit / Cost Price) x 100%
Profit Margin Percentage = (-600 / 750) x 100%
Profit Margin Percentage = -80%

This indicates that our calculation is correct, as we have a negative profit margin percentage, which means a loss. However, we know from the problem statement that the trader made a profit, so we can conclude that our calculation for the profit is incorrect and we need to re-examine the problem.