medium · GMAT Quant

A merchant buys an item for $60 and marks it up so that the profit margin (profit as a fraction of selling price) is 40%. The item is then sold at a 20% discount off this marked price.

What is the merchant's actual profit on the sale?

  1. $24
  2. $12
  3. $16
  4. $20
  5. $8

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