Question

A man buys a plot of land for $300,000. He sells one-third at a loss of 20% and two-fifths at a gain of 25%. At what price must he sell the remaining land to make an overall profit of 10%?

Answer 1

If he bought the land for $300,000, to make a profit of 10% it means the profit will be

= 10% * $300,000

= $30,000

If he sold one-third at a loss of 20% then the selling price will be

= 1/3 * $300,000 * (100% - 20%)

= $80,000

If he sells two-fifths at a gain of 25% then the selling price would be

= 2/5 * $300,000 * (100% + 25%)

= $150,000

To make an overall profit of 10%, he must sell the remaining for

= $300,000 + $30,000 - $80,000 - $150,000

= $100,000