A dealer buys an article at a discount of 20% on its list price and marks it at 25% above the list price. If he allows a 20% discount on the new list price, then his profit percent is:
Show answer & explanation
Correct answer: C
Explanation
The correct answer is option 3 i.e. 25%
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Understanding |
Application |
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Profit % = [(SP – CP)/CP] × 100 Discount on list price = 20% Markup = 25% above the list price Discount on new list price = 20% Suppose list price = Rs. 100 |
Price after discount on list price = CP for dealer = 100 × 0.8 = Rs. 80 After markup, new list price = 100 × 1.25 = Rs. 125 After discount, price = SP = 125 × 0.8 = 100 Hence, Profit percentage = [(100 – 80)/80] × 100 = 2000/80 = 25% |