A trader buys 500 kg cotton for 8,000. If 10% of this cotton is spoiled due to rain, at what rate (₹/kg) should he sell the rest to earn a 20% profit?
Show answer & explanation
Correct answer: A
Explanation
The correct answer is option 1 i.e. 21.
Quantity of spoiled cotton = (10/100) × 500 = 50 kg
Remaining cotton = 500 - 50 = 450 kg
Initial investment = ₹8,000
Profit percentage = 20%
Profit = (20/100) × 8000 = ₹1,600
Total selling price = 8000 + 1600 = ₹9,600
Selling price per kg = 9600/ 450 = ₹
Therefore, the trader should sell the remaining cotton at ₹ per kg.