SOLUTION: A shopkeeper bought a coat for $100 . How much must it be priced, inclusive of 7% GST, if she wants to make a profit of 37% on the cost price?

Question 1119290: A shopkeeper bought a coat for
$100
. How much must it be priced, inclusive of
7%
GST, if she wants to make a profit of
37%
on the cost price?
Found 2 solutions by Theo, greenestamps:
Answer by Theo(13342) (Show Source): You can put this solution on YOUR website!
cost = 100.
gross sales tax = 7% (i think that's what this is).

p = (r-c)/c

p = price
r = revenue or sale price
c = cost.

storekeeper wants a profit of 37%.

.37 = (r-100) / 100

multiply both sides of this equation by 100 to get:

37 = r - 100

add 100 to both sides of this equation to get:

137 = r

that's the sale price.

7% GST on that would be equal to .07 * 137 = 9.59.

the item must be price at 137 plus 9.59 tax = 146.59.

price includes tax.

item is sold for 146.59.

vendor pays sales tax to government and keeps the rest for himself.

vendor keeps 137.

profit is 137 - 100 = 37.

percent profit is 37/100 = .37 = 37%.

Answer by greenestamps(13200) (Show Source): You can put this solution on YOUR website!

The statement of the problem is misleading. The sales tax has nothing to do with the price she needs to set to make a 37% profit.

If the cost was $100, the profit needs to be 37% of $100, which is $37; so the sale price must be $137.

The cost to the customer will be $137 plus 7% sales tax, or 1.07($137) = 146.59; but that figure has anything to do with the question that was asked.
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