# Practice GMAT Problem Solving Question

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A computer store offers employees a 20% discount off the retail price. If the store purchased a computer from the manufacturer for $1000 dollars and marked up the price 20% to the final retail price, how much would an employee save if he purchased the computer at the employee discount (20% off retail price) as opposed to the final retail price.

Correct Answer:

**C**- The original cost of the computer (from the store's perspective) was $1,000.
- The retail price was 20% higher than the original cost, so multiply by 1.20; recall that 1.2 is equivalent to (100% + 20%):

Retail Price: $1000(1.20) = $1,200. - The employee discount price was 20% lower than the retail price, so multiply by 0.80; recall that 0.8 is equivalent to (100% - 20%):

Employee Discount Price: $1200(0.80) = $960. - Find the difference between the employee discount price and the retail price:

$1200 - $960 = $240.

The correct answer is C.

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