Question

A loss of 15% was incurred when Ramesh sold an article at 20% below its MP. Find what is the mark up percentage.

1. (1/2)%
2. (1/4)%
3. (1/16)%
4. (1/32)%

Answer 1

Correct Answer - Option 3 : (1/16)%

Given:

Selling price, SP = (100 – 20)% × Marked price, MP

The loss incurred on sale = 15%

Concept used:

SP on selling 20% below MP = (100 – 15)%  of Cost price

Calculation:

SP on selling 20% below MP = 80/100 × MP

⇒ SP on selling 20% below MP = 4/5 × MP      ----(1)

SP due to loss of 15% on cost price = (100 – 15)% × CP

⇒ SP due to loss of 15% on cost price = 85/100 × CP      ----(2)

Equating (1) and (2),

MP × 4/5 = 17/20 × CP

⇒ MP/CP = (17 × 5)/(20 × 4)

⇒ MP/CP = 17/16

That is, percentage mark up on CP = (MP - CP)/CP × 100

⇒ Percentage mark up on CP = (17 -16)/16 × 100

⇒ Percentage mark up on CP = 1/16%

∴ Percentage mark up on cost price is (1/16) percentage.