A shopkeeper allows a discount of 25% on the marked price of a VCR. How much above cost price must
he mark his goods to make a profit of 20%?
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Answer:
Marked Price should be 60% more than Cost Price
Step-by-step explanation:
CP = Cost Price
SP = Selling Price
MP = Marked Price
Discount = 25%
=> SP = MP - 25% of MP
=> SP = MP - 0.25*MP
=> SP = 0.75*MP ..........(i)
Profit% = 20%
=> SP = CP + 20% of CP
=> SP = CP + 0.2*CP
=> SP = 1.2*CP .........(ii)
From (i) and (ii)
0.75*MP = 1.2*CP
=> MP = (1.2/0.75)*CP
=> MP = 1.6*CP
=> MP = CP + 0.6*CP
=> MP = CP + 60% of CP
=> Marked Price should be 60% more than Cost Price
Verification:
Let CP = 100
MP = 160
Discount = 25% => SP = 0.75*160 = 120
120 = 20% more than 100
=> SP is 20% more than CP
=> Profit is 20% (Thus, verified)
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