A shopkeeper earns a profit of 25% when he sells an article by allowing a 20% discount on its marked price. If the cost price of the article is decreased by 20%, how much discount percentage should he allow now on the same marked price so as to earn the same percentage of profit as earlier?
Show answer & explanation
Correct answer: B
Explanation
The correct answer is Option 2 i.e. 36%.
Let original CP = 100 and SP = 125
MP = 125 × (100/80) = 156.25
New CP = 100 - 20 = 80
New SP = 80 × (5/4) = 100
Discount = 156.25 - 100 = 56.25
Discount percentage = (56.25/156.25) × 100 = 36%