Question

A trader has a weighing balance that show 1050 gm
for a kilogram. He further marks up his cost price
by 20 percent. The net profit percentage is
(1) 20%
(2) 26%
(3) 32%
(4) 16%

Answer 1

Lets assume that the cost price of one gram is Rupee 1.

Now, he has marked up his cost by 20%. So the mark up price would be Rupees 1.20 for one gram.

But the trader sells 1000 g which actually is 1050 grams,

So he is charging a customer

$1050 \times 1.20 = 1260$ for 1000 grams

Although in actual it should be Rupees 1000.

Therefore, his profit percentage can be given by:

$\frac{1260-1000}{1000} =0.26$

Or we can say that it is 26%.  

So, the net profit percentage of the trader is 26%.