# GMAT Quant: Word Problems on Discount

Discounts are the amount which a shopkeeper reduces from his quoted price and sells you the product. Generally, the discounts are calculated on the quoted price or the marked price. Therefore

$Discount \; \% = \frac{Marked \; Price – Selling \; Price}{Marked \; Price} \times 100$

Few other terminologies:

1. Marked price (MP): The initial quoted price
2. Selling price (SP): The Price which you pay after getting discounts.
3. Cost Price (CP): The price at which the shopkeeper purchased the good or the amount that the seller expend to manufacture the good.

1. A shopkeeper even after giving a discount of 20% on the marked price was still able to make a profit of 30%. By what percent is the marked price higher than the cost price?

Let the cost price be x

Selling price = 1.3x

Putting the selling price in the above formula, we get marked price as 1.3x/0.8 = 1.625x

Therefore, the percentage by which the marked price exceeds the cost price is

2. If a merchant sells a good at 80% of the marked price, he makes a loss of 12%. What will be the profit if he sold the good at 95% of the marked price?

Let the marked price be x

SP = 0.8x

CP = 0.8x/0.88 = 0.909x

New SP = 0.95x

More Examples on Relative Speed and Triangles.

BYJU’S will be glad to help you in your GMAT preparation journey. You can ask for any assistance related to GMAT and MBA from us by calling us at +918884544444. You can write to us at gmat@byjus.com.