A shopkeeper marks an article at Rs. 150 and sells it at a discount of 25%. He also gives a gift worth Rs. 2.5. If the still makes a 10% profit, then the cost price (in Rs.) of the article is:
Show answer & explanation
Correct answer: A
Explanation
The correct answer is option 1 i.e. 100.
The selling price before accounting for the gift = 150 × (1 - 25/100)
⇒ 150 × 0.75 = 112.5 Rs.
Since the shopkeeper also gives a gift worth Rs. 2.5
Net Selling Price = 112.5 − 2.5 = 110 Rs.
The shopkeeper still makes a profit of 10%.
Selling Price = Cost Price × (1 + Profit %/100)
⇒ 110 = Cost Price × (1 + 10/100)
⇒ Cost Price = 110/1.1 = 100 Rs.