A car dealer bought a second-hand car for 250,000 and spent N 70,000 refurbishing it. He then sold the car for N400,000. What is the percentage gain?

Analyze the question: The dealer bought a car, spent extra money on it, then sold it. We need the percentage gain (profit as a percentage of the total cost).

Concept:

• Cost Price (CP) = purchase price + any extra expenses (like refurbishing)
• Gain = Selling Price − Cost Price
• Percentage gain = (Gain ÷ CP) × 100%

Solution:

1. Total cost price: CP = 250,000 + 70,000 = N320,000

2. Gain: Gain = 400,000 − 320,000 = N80,000

3. Percentage gain: % gain = (80,000 ÷ 320,000) × 100 = (1/4) × 100 = 25%

Answer: The percentage gain is 25%, which is option C.

Tip: Always add extra expenses (repairs, transport, refurbishing) to the original price to get the true cost price. Percentage gain or loss is always calculated on the cost price, not the selling price. A common mistake here is using 250,000 as the CP, which gives 60% (option A), a trap answer.