A seller marks an item for ₹500 and sells it at a discount of 25%. He also gives a gift worth ₹65. If he still makes 24% profit, then the cost price of the item (in ₹) is:
Show answer & explanation
Correct answer: C
Explanation
The correct answer is option 3 i.e. 250.
Let's break down the problem step by step:
Selling Price after Discount:
Discount = 25% of 500 = 125
Selling Price (SP) = Marked Price - Discount = 500 - 125 = 375
Effective Selling Price (considering the gift):
Effective SP = SP - Gift Value = 375 - 65 = 310
Cost Price (CP):
Given, the seller makes a 24% profit.
So, SP = CP + 24% of CP
Or, 310 = CP + (24/100) × CP
Or, 310 = (124/100) × CP
Therefore, CP = (310 × 100) / 124 = 250
So, the cost price of the item is ₹250.