Shopkeeper A marks up his price for an item at 25% and offers a discount of 15%. The same item is marked at 20% by another shopkeeper B and sold at a discount of 12%. Who gets a better deal in terms of % profit and by what profit percentage does he sell that item?
Show answer & explanation
Correct answer: D
Explanation
The correct answer is Option 4 i.e. A, 6.25%.
Let the cost price (CP) of the item be ₹100
For A:
Marked price (MP) after a 25% markup
MP = 100 + 25% of 100 = 125
Selling price (SP) after a 15% discount
⇒ SP = MP - 15% of 125
⇒ SP = 125 - 15% × 125
⇒ SP = 125 - 18.75 = 106.25
Profit = SP - CP
⇒ 106.25 - 100 = 6.25
Profit% = 6.25/100 × 100 = 6.25%
Now,
For B:
Marked price (MP) after a 20% markup
⇒ MP = 100 + 20% of 100 = 120
Selling price (SP) after a 12% discount
⇒ SP = MP - 12% of 120
⇒ SP = 120 - 12/100 × 120
⇒ SP = 120 - 14.4 = 105.6
Profit = SP - CP
⇒ 105.6 - 100 = 5.6
Profit% = 5.6/100 × 100 = 5.6%
Thus,
Difference in profit % = 6.25 - 5.6 = 0.65%
Hence, A gets a better deal by 0.65%