Correct Answer - Option 2 : 36%
Given :
A shopkeeper gained 25% while allowing 20% discount
Formula used :
Selling price = Marked price - discount on marked price
Selling price = cost price + profit on cost price
Calculations :
Let the initial cost price be 100x
Selling price = 100x + 25% of 100x
⇒ 125x
Selling price = Marked price - 20% of marked price
Marked price = 625x/4 = 156.25x
Now Cost price got decreased by 20%, so new cost price
New cost price = 80x
New selling price = 80x + 25% of 80x
⇒ 100x
Discount per cent on marked price to get this selling price
Discount per cent = (Marked price - selling price)/(Marked price) × 100
⇒ (156.25x - 100x)/(156.25x) × 100
⇒ 36%
∴ Discount should be 36%