A wholesaler allows a discount of 20% on the list price to a retailer who sells it at 5% discount on the list price. If a customer paid Rs. 114 for an article, what profit is made by the retailer? Find, also the retailer's percentage profit on his cost.

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Solution

Lets wholesaler list prices is $R s 100$
Then wholesaler gives $20 %$ discount to retailer.
Then selling price to retailer $= 100 - 20 = R s 80$
Retailer sell $5 %$ to customer discount on list price $= R s 5$
Then, retailer selling price $= 100 - 5 = R s 95$
As per question, customer paid $R s 114$ to retailer
Then list price $= \frac{100 \times 114}{95} = 120$
Then C.P of retailer $= \frac{80 \times 120}{100} = 96$
Profit gain by retailer $= 114 - 96 = R s 18$
$%$ of profit = $\frac{18 \times 100}{96} = 18.75 %$

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