A new mobile is introduced into the market and is marked at 25% above its original cost price. What discount should be given on the marked price to gain a profit of 20%?
Show answer & explanation
Correct answer: C
Explanation
The correct answer is option 3 i.e. 4%.
Given:
A new mobile is introduced into the market and is marked at 25% above its original
cost price
Profit% = 20%
Calculations:
Let the cost price be 100x
Marked price = 125% of 100x = 125x
Selling price when profit is 20% = 120% of 100x = 120x
Discount% = [(125x - 120x)/125x] × 100
⇒ [5x/125x] × 100
⇒ 4%