A shopkeeper fixes the selling price of an article 20% above its cost. If the cost price increases by 20% and he increases the selling price by 16%, then his profit percentage (on the increased cost) is:
Show answer & explanation
Correct answer: A
Explanation
The correct answer is option 1 i.e. 16%.
Let original CP = 100
Initial SP = 120
New CP = 120
New SP = 120 × (116/100) = 139.20
Profit = 139.20 - 120 = 19.20
Profit percentage = (19.20/120) × 100 = 16%