A shopkeeper marks his goods k% more than their cost price. If the shopkeeper allows a 20% discount and still gains 25%, then find the value of k.
Show answer & explanation
Correct answer: D
Explanation
The correct answer is option 4 i.e. 56.25%.
Let the cost price be 100.
Marked price = 100 + k
Selling price after 20% discount = (100 + k) × 0.80
Given: Profit = 25%, so Selling price = 100 × 1.25 = 125
Now, (100 + k) × 0.80 = 125
=> 100 + k = 125 ÷ 0.80 = 156.25
=> k = 156.25 - 100 = 56.25