A shopkeeper purchases a watch at a cost price of Rs 8000. He marks it 50% above the cost price and offers a discount of 20% on the marked price. Find his profit or loss on the transaction.
Show answer & explanation
Correct answer: B
Explanation
Given:
Cost Price (CP) = ₹8,000
Marked Price (MP) = 50% higher
Discount = 20%
According to the formulas:
Marked Price = CP × (1 + 50%)
Selling Price = MP × (1 − 20%)
Marked Price = 8,000 × 1.5 = 12,000
Selling Price = 12,000 × 0.8 = 9,600
Profit = 9,600 − 8,000 = 1,600