A trader allows a discount of 5% for cash payment. What percentage above the cost price must he mark his goods to make a profit of 14%?
Show answer & explanation
Correct answer: D
Explanation
The correct answer is option 4 i.e. 20%.
Let the cost price (CP) = 100
Profit percentage = 14%
SP = 114
Let the marked price (MP) = x
Discount = 5%
(95/100)x = 114
⇒ 0.95x = 114
⇒ x = 114/0.95 = 120
Percentage above CP = 120 - 100 = 20%
Therefore, the trader must mark his goods 20% above the cost price.