If the selling price of an item is increased by 25% and the profit also increases from 20% to 30%, what is the percentage increase in the cost price?
Show answer & explanation
Correct answer: D
Explanation
The correct answer is option 4 i.e. 15.38%.
Let CP = 100
Original SP = 100 + 20 = 120
New SP = 120 × 1.25 = 150
New CP = 150/1.30 ≈ 115.38
Increase in CP = 115.38 - 100 = 15.38%