Question

If a salesman marked up an article at an amount equal to the cost price of the article and allowed a discount of 20% in it, find what profit he earned during the sale.

1. 40%
2. 50%
3. 60%
4. 20%
5. 100%

Answer 1

Correct Answer - Option 3 : 60%

Given:

Mark up on the article = Cost price of the article

Discount allowed = 20%

Concept used:       

Market price × percentage after allowing discount = selling price

Calculation:

As mark up on the article = Cost price of the article, CP

Market price, MP = CP + CP

Percentage after allowing the discount = 100% – 20%

⇒ Percentage after allowing the discount = 80%

MP × 80% = Selling price, SP

⇒ 2CP × 4/5 = SP

⇒ CP × 8/5 = SP

⇒ SP/CP = 8/5

 (SP – CP)/CP = (8 – 5)/5

⇒ P/CP = 3/5

⇒ P/CP × 100 = 3/5 × 100

Profit percentage = 60%

∴ The profit earned on the sale is 60%.