Derrick bought a MP3 player with 7/10 of his money. He wanted to buy a digital camera which cost $20 less than the MP3 player but he was short of $40. How much did the digital camera cost?

(1) $75
(2) $85
(3) $95
(4) $105

Let Derrick's total money be x. Then he spent 7/10x on the MP3 player and had 3/10x left. Let the cost of the digital camera be y. We know that:

y = 7/10x - 20 (because it is $20 less than the MP3 player)
3/10x = 40 + y (because he was short of $40 to buy the camera)

Substituting the first equation into the second equation, we get:

3/10x = 40 + 7/10x - 20
3x = 400 + 7x - 200
4x = 200
x = 50

So his total money was $50. Substituting this into the first equation, we get:

y = 7/10(50) - 20 = 5

Therefore, the digital camera cost $85, which is option (2).

Let's assume that Derrick's total money is represented by 'x'.

According to the question, Derrick bought a MP3 player with 7/10 of his money. Therefore, the cost of the MP3 player is (7/10)x.

The digital camera costs $20 less than the MP3 player. So, the cost of the digital camera is (7/10)x - $20.

Derrick was short of $40 for the digital camera, which means he had (7/10)x - $40.

Now, let's set up an equation to solve for x:

(7/10)x - $40 = 0

Multiplying both sides by 10 to get rid of the fraction:

7x - $400 = 0

Adding $400 to both sides:

7x = $400

Dividing both sides by 7:

x = $400/7

Calculating x:

x ≈ $57.14

Now, substituting the value of x into the equation for the cost of the digital camera:

(7/10)x - $20 = (7/10)($57.14) - $20 ≈ $39.99

Therefore, the digital camera costs approximately $39.99.

However, none of the given options match this amount, so it seems there might be an error in the question or answer choices.