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A particular style of watch costs the retailer $85 per watch. At what price should the retailer mark them so he can sell them at a 15% discount off the original price and
still make 25 % profit on his cost ?

Answer :

Let x be the market price.

We know that we want a profit of 25% of the original cost, this means that we need a profit of:

[tex]0.25\cdot85=21.25[/tex]

Now, if we make a discount of 15% to the market price this means that the selling price will be:

[tex](1-0.15)x=0.85x[/tex]

But we need this to be equal to the profit plus the retailer price, then we want:

[tex]\begin{gathered} 0.85x=21.25+85 \\ 0.85x=106.25 \end{gathered}[/tex]

Solving for x we have:

[tex]\begin{gathered} 0.85x=106.25 \\ x=\frac{106.25}{0.85} \\ x=125 \end{gathered}[/tex]

Therefore, the mark price is $125

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