Reena makes a profit of 20% by selling pens at a certain price. If she charges ₹5 more on each pen, she will gain 40%. The initial selling price of one pen was:
Show answer & explanation
Correct answer: A
Explanation
The correct answer is Option 1 i.e. ₹30.
Let the initial Cost Price (CP) be ₹x.
Initial Selling Price (SP1) = CP + Profit
Profit for SP1 = (20% of CP) = (20/100) × x
SP1 = x + (20/100) × x
SP1 = x + 0.2x
SP1 = 1.2x
New Selling Price (SP2) = SP1 + ₹5
SP2 = 1.2x + 5
Profit for SP2 = (40% of CP) = (40/100) × x
SP2 = x + (40/100) × x
SP2 = x + 0.4x
SP2 = 1.4x
Given SP2 = 1.2x + 5
⇒ 1.4x = 1.2x + 5
⇒ 1.4x - 1.2x = 5
⇒ 0.2x = 5
⇒ x = 5 / 0.2
⇒ x = 25
Initial Selling Price (SP1) = 1.2x
SP1 = 1.2 × 25
SP1 = 30