Question

A trader marks up a product he is selling for 20% profit. If he sells it at a discount of 15%, his net gain percentage is,

• A. 2.5%
• B. 3%
• C. 2%
• D. 1.5%

Answer 1

The correct option is C

2%

Profit P = 20% of C.P which is extra to CP, where C.P is the cost price and P is the profit. This is by definition.

The trader marks up the cost price C.P in such a way that the profit in excess of CP is 20% of CP.

Thus the marked price, MP = (100+20)% of CP = (120% of CP)

The discount is on this MP.

So discount 15% on MP = 15% of (120% of CP) = 18% of CP

The MP reduces by this amount after discount and reaches the Sale price SP.

So,

SP = MP− discount

=(120% of CP)−(18% of CP)

=102% of CP

So the Sale price S.P is in excess of Cost price by 2% of Cost price which is then the profit by definition.