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A shopkeeper sold an article at 25% profit. Afterward, when the cost price reduced by 20%, then he also reduced the selling price by 20%. His new percentage of profit on cost price will be:
1. 20%
2. 25%
3. 30%
4. 35%

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Correct Answer - Option 2 : 25%

Given:

A shopkeeper sold at 25% profit

Formula used:

Profit% = (Profit/costprice) × 100

Calculation:

Let the C.P. = 100 unit

⇒ profit = 25% then S.P. = 125 Unit

⇒ C.P. reduced by 20% = 100 - 20= 80 unit

⇒ New S.P. after reduing 20% = 125 - (20% of 125) = 80% of 125

⇒ new S.P. = \(\frac {80}{100} \times125\) = 100 unit

Profit= new S.P. - new C.P.

⇒ 100 - 80 = 20 unit

Percentage profit = \(\frac{Profit}{C.P.}\times 100\)

⇒ Percentage profit = \(\frac{20}{80} \times 100\) = 25%

∴ New percentage of profit over is 25%.

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