Question

A bought a tape recorder for Rs.8000 and sold it to B. B in turn sold it to C, each earning a profit of 20%. Which of the following is true?

• A. A and B earn the same profit
• B. A earns more profit than B
• C. A earns less profit than B
• D. Cannot be determined

Answer 1

The correct option is C A earns less profit than B

$\because$ Cost price of tape recorder for A = Rs 8000
$\therefore$ Cost price of tape recorder for B = 20% profit on cost price for A
$=\frac{20}{100}\times 8000+8000=20\times 80+8000$
=1600 + 8000 = Rs 9600

Cost price of tape recorder for C = 20% profit on cost price for B
$=\frac{20}{100}\times 9600+9600$
= 1920 + 9600 = Rs 11520
Here, profit for A = Rs 1600
Profit for B = Rs 1920
So, A earns less profit than B.