Correct Answer - Option 2 : 14.28%
Given:
If an article is sold at 70% of the selling price (S.P), then there will be a loss of 20%.
Formula Used:
Profit/Loss% = {(SP – CP)/CP}×100
Calculation:
Let the original (SP) selling price be Rs 100 unit
Now if it is sold at 70% of this S.P, the new S.P will be
⇒ 70% of 100 unit = 70 unit
But as given the loss% is 20% (-1/5) here negative sign indicates the loss
Now as mentioned in the formula,
⇒ 20% = (5 – 1)/5 = SP/CP
⇒ CP = SP(5/4) (As SP is 70 unit)
⇒ CP = (70×5)/4 = (35×5)/2 = 175/2 units
The original profit% will be {(SP – CP)/CP}×100
⇒ Profit% = {(100 – 175/2)/(175/2)}×100 = 1/7 = 14.28%
∴ The profit% is 14.28%