The marked price of a pen is 25% more than its cost price. The pen is sold for ₹220 after a discount of ₹30. What is the profit percentage?
Show answer & explanation
Correct answer: A
Explanation
The correct answer is option 1 i.e 10%
Let's assume that the cost price of the pen is x.
The marked price of the pen is 25% more than its cost price, which means:
Marked price = Cost price + 25% of Cost price
Marked price = x + 0.25x = 1.25x
The pen is sold for ₹220 after a discount of ₹30, so the selling price of the pen is:
Selling price = Marked price - Discount
Selling price = 1.25x - 30
We know that the profit is the difference between the selling price and the cost price. So, the profit earned on the sale of the pen is:
Profit = Selling price - Cost price
Profit = (1.25x - 30) - x
Profit = 0.25x - 30
The profit percentage can be calculated using the formula:
Profit percentage = (Profit / Cost price) x 100
Substituting the value of Profit, we get:
Profit percentage = ((0.25x - 30) / x) x 100
Simplifying the above equation, we get:
Profit percentage = (25 - (300/x))%
To find the value of x, we need to use the given information that the pen is sold for ₹220 after a discount of ₹30:
Selling price = ₹220
Marked price - Discount = ₹220
1.25x - 30 = 220
1.25x = 250
x = 200
So, the cost price of the pen is ₹200.
Now, substituting the value of x in the equation of profit percentage, we get:
Profit percentage = (25 - (300/200))%
Profit percentage = 10%
Therefore, the profit percentage on the sale of the pen is 10%.