Question

A shopkeeper marks up the price of an item by 40%. If he wants to earn a profit of 5%, what is the maximum discount he can give on that item?

• A. 35%
• B. 20%
• C. 28%
• D. 25%

Answer 1

The correct option is D 25%

Let the cost price of the product be = x
Then the marked price will be = 1.4x
Maximum allowable discount $=1.4x(1-\frac{k}{100})=1.05x$
$\Rightarrow 1.4x\times \frac{k}{100}=0.35x$
$\Rightarrow k=0.35\times \frac{100}{1.4}=25$