David purchased an item and marked his price up by 10%. He sold the same item by giving a discount of 5% and he made a profit ₹ 12.87. What is the actual cost price of the item?
Show answer & explanation
Correct answer: C
Explanation
The correct answer is option 3 i.e. ₹ 286
Given:
David purchased an item and marked his price up by 10%.
He sold the same item by giving a discount of 5% and he made a profit ₹ 12.87
Let the cost price of the item be 100x
Selling price = Marked price × (100 - discount%)/100
Marked price = 110% of 100x = 110x
Selling price after a discount of 5% = 95% of 110x = 104.5x
Profit = 104.5x - 100x = 4.5x
⇒ 4.5x = 12.87
⇒ x = 2.86
Hence, the cost price = 100x = 100 × 2.86 = ₹ 286