A shopkeeper allows a discount of 10% on the printed price of his goods and thus gains 20%. What is the ratio between the cost price and the printed price of the item?
Show answer & explanation
Correct answer: A
Explanation
The correct answer is Option 1 i.e. 3 : 4.
Let the printed price be Rs. 100
Discount of 10% on the printed price of his goods,
⇒ SP = 100 - (100 × 10%) = Rs. 90 then,
Gains 20% then CP is,
⇒ CP = {100/(100 + Profit %)} × SP
⇒ CP= {100/(100 + 20%)} × 90
⇒ CP = 100/120 × 90 = Rs. 75
Required ratio = CP : Printed price = 75 : 100 = 3 : 4