Question

An article was sold at 25% below its market price. If the article was marked up by 20%, what is the profit or loss percentage?

1. 10%
2. 20%
3. 25%
4. 15%
5. 5%

Answer 1

Correct Answer - Option 1 : 10%

Given:

Mark up in cost price = 20%

Selling price, SP = (100 – 25)% × Market price

Concept used:

Market price × (100 – discount)% = Selling price

Calculation:

Let the market price be MP.

SP = 75% × MP

MP = 120/100 × CP

⇒ CP × 12/10 × 3/4 = SP

⇒ CP × 9/10 = SP

⇒ SP/CP = 9/10

(CP – SP)/CP = (10 – 9)/10

CP – SP = loss, L

⇒ L/CP = 1/10

L/CP × 100 = 1/10 × 100

⇒ Loss percentage, L% = 10%

∴ The sale of the article results in a loss of 10%.