GMAT paper test 55 #7

[Guest]

A merchant made a gross profit of $40 from the sale of a vase. If this gross profit was 25% of the cost of the vase to the merchant, for how many dollars more should the merchant have sold the vase for the gross profit to have been 30% of the cost?

A) $2
B) $5
C) $8
D) $10
E) $12


I'm not sure how to set up the equation. I'd like to learn how to set up this type of problem.

[GMAT 2007]

25% of cost = 40$
cost = 40*4 = 160$
To make 30% profit on 160 the profit = 16*3 = 48$

So merchant should have sold it for 8$ more. Answer is C

[Guest]

Thanks so much!