Question

A watch dealer pays $10\%$ customs duty on a watch which costs $Rs.500$ abroad. For how much should he mark it, if he desires to make a profit of $20\%$ after giving a discount of $25\%$ to the buyer?

Answer 1

Initial price of the watch $=Rs.500$

Therefore, actual price paid by the dealer $=500+10\%\text{of}500$

$=500+\frac{10}{100}\times 500$

$=Rs.550$

Hence, cost price of the watch is $Rs.550$

Now, let the marked price (MP) of the watch be $Rs.x$.

Now, profit percent to be earned on the watch $=20\%$

Therefore, selling price (SP) of the watch $=\frac{100+\text{Profit}\%}{100}\times CP$

$=\frac{100+20}{100}\times 550$

$=12\times 55$

$=Rs.660$

Also, MP $-$ Discount = SP

$\Rightarrow x-25\%\text{of}x=660$

$\Rightarrow \frac{100x-25x}{100}=660$

$\Rightarrow \frac{3x}{4}=660$

$\Rightarrow x=660\times \frac{4}{3}=880$

Therefore, MP of the watch should be $Rs.880$ .