In a transaction the profit percentage is 70% of the cost. If the cost further increases by 40%, but the selling price remains the same, what is the difference between the two profit percentages?
Show answer & explanation
Correct answer: A
Explanation
The correct answer is option 1 i.e. 48.57%.
Given:
In a transaction the profit percentage is 70% of the cost
Formula used:
Profit = Selling price - Cost price ---- (1)
Profit% = (Profit/cost price) × 100 ----- (2)
Calculations:
Let the cost price be 100
Using equation (1), we get
Profit = 100 × 70/100 = 70
Selling price = 100 + 70 = 170
Cost price = 100 + 100 × 40/100 = 140
Profit = 170 - 140 = 30
Profit percentage = (30/170) × 100 = 21.43%
Required difference = 70 - 21.43 = 48.57%