Correct Answer - Option 1 : Rs. 1,860
Given:
Profit earned by selling an article for 1680 = loss incurred by selling same article for 1420
Profit percent have to be earned = 20%
Formula used:
Profit = Selling price – Cost price
Loss = Cost price – Selling price
% Profit = profit/cost price × 100
% loss = loss/cost price × 100
Selling price = (100 ± a %) /100 × C.P
Where + a% = percent profit,
And, – a% = percent loss
Concept used:
Profit and loss is always calculated on C.P
Calculation:
Let C.P of the article be X.
Profit earned by selling at 1680 = 1680 – X
Similarly, Loss incurred by selling at 1420 = X – 1420
Profit earned = loss incurred
1680 – X = X – 1420
2X = 1680 + 1420 = 3100
X = 3100/2 = 1550
C.P of article = X = 1550
% Profit = 20%
S.P = (100 + 20)/100 × 1550
⇒ 120/100 × 1550
⇒ 1860
∴ Selling price of article to gain 20% profit is Rs. 1,860.