Questions: Last year the price of a Jeep wagon was 16,000. It was announced that this year's price would go up by 1/8 of last year's price. This year the dealer expects to make a profit of 1/9 of the selling price. What is the new car price and what is the profit that a dealer makes on the sale of the Jeep?

Solution Steps

To find the new car price, we need to calculate the increase in price, which is \(\frac{1}{8}\) of last year's price, and add it to the original price. For the profit, we calculate \(\frac{1}{9}\) of the new selling price.

The price increase is \(\frac{1}{8}\) of last year's price. Given that last year's price was \(\$16,000\), the increase is calculated as follows: \[ \text{Price Increase} = \frac{1}{8} \times 16000 = 2000 \]

The new car price is the sum of last year's price and the price increase: \[ \text{New Car Price} = 16000 + 2000 = 18000 \]

The dealer's profit is \(\frac{1}{9}\) of the new car price. Therefore, the profit is: \[ \text{Profit} = \frac{1}{9} \times 18000 = 2000 \]

Final Answer