A shopkeeper increases the selling price of an article by 15%. After increasing the selling price, he noticed that the profit percentage changed from 5% to 15%. The percentage increase in the cost price is:
Show answer & explanation
Correct answer: D
Explanation
The correct answer is option 4 i.e. 5%
Given that
A shopkeeper increases the selling price of an article by 15%
The profit percentage changed from 5% to 15%
Let the initial cost price be 100 units
The initial selling price = 100 + 5 = 105 units
Now the selling price = 105 × 1.15 = 120.75 units
The latest cost price, when profit is 15%, = 120.75 × 100/115 = 105 units
Hence, the cost price is increased by = [(105 - 100)/100] × 100 = 5 %