What percentage of profit did Mrs. Levine earn by purchasing a property at 80% of market value and reselling it for full market value?

What percentage of profit did Mrs. Levine earn by purchasing a property at 80% of market value and reselling it for full market value?

• A. 20%
• B. 25%
• C. 33%
• D. 50%

Answer: (B)

To determine Mrs. Levine's profit percentage, it's important to first understand the concepts of purchase price and market value. If she buys a property at 80% of the market value, it implies that she spent only 80% of what the property is worth when sold at full market value. Let's denote the full market value of the property as $100 (as a simple base for calculation). By purchasing it at 80% of this value, Mrs. Levine paid $80 ($100 x 0.80). When she resells the property for the full market value of $100, she's making a profit of $20 ($100 - $80). To find the profit percentage, you divide the profit ($20) by the purchase price ($80) and then multiply by 100 to get the percentage: Profit Percentage = (Profit / Purchase Price) x 100 Profit Percentage = ($20 / $80) x 100 = 25% Thus, her profit percentage based on her initial investment is 25%. This indicates that for every dollar she invested, she gained $0.25 in profit when selling at market value, which is why the answer of 25% is correct.

To determine Mrs. Levine's profit percentage, it's important to first understand the concepts of purchase price and market value. If she buys a property at 80% of the market value, it implies that she spent only 80% of what the property is worth when sold at full market value.

Let's denote the full market value of the property as $100 (as a simple base for calculation). By purchasing it at 80% of this value, Mrs. Levine paid $80 ($100 x 0.80). When she resells the property for the full market value of $100, she's making a profit of $20 ($100 - $80).

To find the profit percentage, you divide the profit ($20) by the purchase price ($80) and then multiply by 100 to get the percentage:

Profit Percentage = (Profit / Purchase Price) x 100

Profit Percentage = ($20 / $80) x 100 = 25%

Thus, her profit percentage based on her initial investment is 25%. This indicates that for every dollar she invested, she gained $0.25 in profit when selling at market value, which is why the answer of 25% is correct.