A shopkeeper allowed 10% discount on his goods to make 20% profit, & If he sold a watch for RS 10170 with 13 % vat, by what percent is the discount to be increased to make only 12% profit
Answers
Answer:
Discount has to be increased from 10% to 16% in order to reduce profit from 20% to 12%
Cost of Purchase of shopkeeper : ₹7500
Showcase Price : ₹10000
Scenario 01:
After Discount of 10% : ₹10000–₹1000 = ₹9000
VAT of 13% : ₹1170
Selling Price : ₹9000+₹1170 = ₹10170
Profit = ₹9000-₹7500 = ₹1500
Profit as Percentage = 1500/7500*100 = 20%
Scenario 02:
After Discount of 16% : ₹10000–₹1600 = ₹8400
VAT of 13% : ₹1092
Selling Price : ₹8400+₹1092 = ₹9492
Profit = ₹8400-₹7500 = ₹900
Profit as Percentage = 900/7500*100 = 12%
Answer:
Key concepts to learn :
Discount is always applied on marked price.
Profit = SP - CP
VAT is applied on Selling Price
SP = 10170/113 x 100 = 9000
If profit is 20% then :
CP = 9000/120 x 100 = 7500
MP = 9000/90 x 100 = 10000
For 12% profit, SP = 7500 x 112/100 = 8400
=> SP = 8400/10000 x 100 = 84% of MP
=> Discount = 16% of MP