Correct Answer - Option 3 : 12.5%
Given:
30% discount to marked price
Loss percentage = 20%
Concept used:
It will reach break-even when SP = CP
SP = CP × (100 - L)%
Calculation:
Let the marked price be MP and the cost price be CP.
MP × (100 - 30)% = CP × (100 - 20)%
MP/CP = 8CP/7
Let the discount on MP to reach break even be d%
MP × (100 - d)% = SP
8CP/7 × (100 - d)% = CP
(100 - d)/100 = 7/8
d = 100/8 = 12.5%
∴ Required discount is 12.5%.