Correct Answer - Option 4 : No profit or loss
Given:
Mark price = 25% above the cost price
Discount = 20%
Formula Used:
Selling price = Marked price × (100 - Discount%)/100
Profit = Selling price - Cost Price
Profit % = (Profit × 100)/Cost price
Calculation:
Let assume that cost price = Rs. 100
Marked price = 100 + 25% of 100
⇒ Rs. 125
Selling price = Marked price × (100 - Discount%)/100
⇒ 125 × (100 - 20)/100
⇒ 100
Profit = Selling price - Cost Price
⇒ 100 - 100 = 0
Profit % = (Profit × 100)/Cost price
⇒ (0 × 100)/100 = 0
∴ In this statement, the shopkeeper earns no profit no loss.