Question

A businessman purchases an item at a certain price and marks its price up by 30%. He sells the item at a certain discount on markup price and makes a net profit of 4% on the whole transaction. Find the discount given by businessman on markup price.
1. 10
2. 15
3. 26
4. 20

Answer 1

Correct Answer - Option 4 : 20

Given:

Price and marks its price up = 30%

A certain discount on markup price and makes a net profit of 4% on the whole transaction.

Formula used:

Marked price = {(100 + mark up%)/100} × C.P

Where, C.P = Cost price

Cost price/Marked price = (100 – Discount%)/(100 + Profit%)

Calculation:

Let the cost price be Rs. x

Cost Price/Marked Price = (100 – Discount%)/(100 + 4%)

⇒ 100/130 = (100 – Discount%)/104

⇒ 80 = 100 – Discount%

⇒ Discount% = 20%

∴ The discount given by businessman on markup price is 20%.