Question

If on an item a company gives 25% discount, they earn 25% profit.if they now give 10% discount then what is the profit percentage.?

Answer 1

Answer: If the company gives a 10% discount, the profit (percentage) earned by the company is 37.5%

We arrive at this answer by following these steps:  

First, we find the cost of the product by using the discount and profit information given in the question.

Let the Selling Price of the product before any discount be INR 100.

        Selling Price                                             100.00

Less: Discount @ 25%                                        -25.00 (0.25 *100)

       Discounted Selling Price                             75.00

Less: Profit earned on Discounted Selling Price @ 25%         -18.75 (0.25 * 75)

        Cost of the product                                                       INR 56.25    

Now that we know the cost of the product, we can find the profit in INR when a 10% discount is offered.

Let the Selling Price of the product before any discount be 100.

        Selling Price                               100.00

Less: Discount @ 10%             -10.00 (0.10 *100)

        Discounted Selling Price                                        90.00

Less: Cost of the product                                               -56.25

     Profit from sale of product at discount              INR33.75

Next we’ll calculate profit percentage with the following formula:

$Profit Percentage = \left ( \frac{Profit}{Discounted Selling Price} \right ) * 100$

Profit Percentage = \left ( \frac{33.75}{90} \right ) * 100

$Profit Percentage = 37.50% (0.375 *100 )$