A dealer allows 25% discount on the marked price of an article and gains 20%. If the cost price of the article increases by 20%, how much discount percentage should he allow on the market price so as to earn the same percentage of profit as before?
Show answer & explanation
Correct answer: B
Explanation
The correct answer is Option 2 i.e. 10%
| Application |
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Case I: Let CP = 100 So, SP = 120 MP = 120/75 × 100 = 160 |
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Now, CP = 120 For the profit of 20%: SP = 120 × 1.2 = 144 Here, MP = 160 So, Discount = [(160 - 144)/160] × 100 = 10% |