A merchant sells an item for $180, making a profit of 20% of the cost. What was the original cost of the item?

A $144

B $150

C $160

D $156

✓ Correct Answer: Option B

Let C be the cost. Selling price = Cost + Profit. Profit = 0.20C. So, $180 = C + 0.20C = 1.20C. Solving for C: C = $180 / 1.20 = $150.

💡 Why is B) the correct answer?

The correct answer to the question "A merchant sells an item for $180, making a profit of 20% of the cost. What was the original cost of the item?" is Option B: $150.

The other options — A) $144, C) $160, D) $156 — are incorrect for this GRE Exam Prep question. As explained above: Let C be the cost. Selling price = Cost + Profit. Profit = 0.20C. So, $180 = C + 0.20C = 1.20C. Solving for C: C = $180 / 1.20 = $150.

📚 About This GRE Exam Prep Practice Question

This 2-level GRE Exam Prep question from the Quantitative Reasoning topic is part of BrainForge Quiz's free exam preparation library. Each question includes the correct answer and a detailed explanation to help you understand the underlying concept, not just memorize the answer.

How to use this page: Read the question above, consider all four options (A through D), then check the highlighted correct answer and explanation. For active timed practice, start a free GRE Exam Prep practice test or use flashcards for spaced repetition review.

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A merchant sells an item for $180, making a profit of 20% of the cost. What was the original cost of the item?

✓ Correct Answer: Option B

📚 About This GRE Exam Prep Practice Question

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