A dealer marked the price of an item 30% above the cost price. He allowed two successive discounts of 15% and 20% to a particular customer. As a result, he incurred a loss of ₹696. At what price did he sell the item to the customer?
Show answer & explanation
Correct answer: D
Explanation
The correct answer is option 4 i.e. ₹5,304.
Let the cost price (CP) be ₹100.
Marked price (MP) = ₹100 + 30% of 100 = ₹130
Apply two successive discounts:
After 15% discount: 130 × 0.85 = ₹110.50
After 20% discount: 110.50 × 0.80 = ₹88.40
So, selling price (SP) = ₹88.40 when CP = ₹100
Loss = ₹100 - ₹88.40 = ₹11.60
Now use proportion:
If ₹11.60 loss → actual loss ₹696
Then, actual SP = (88.40 / 11.60) × 696 = ₹5,304