A watch dealer marks the price of a luxury watch 35% above its cost price. During an annual sale, the dealer offers a primary discount of 20% on the marked price. To attract more buyers, a second successive discount of y% is given. If the dealer’s overall profit on the transaction is 8% of the cost price, find the value of the second discount y.
Show answer & explanation
Correct answer: D
Explanation
Given:
Markup = 35%
First Discount = 20%
Second Discount = y%
Profit = 8%
According to the formula:
Selling Price = CP × 1.35 × 0.8 × (1 − y/100)
Profit of 8% ⇒ Selling Price = 1.08 × CP
1.35 × 0.8 × (1 − y/100) = 1.08
1.08 × (1 − y/100) = 1.08
(1 − y/100) = 1
y = 0