Correct Answer - Option 2 : Rs. 1575

**Given:**

The selling price of an item at 20% loss = Rs. 1200

**Concept used:**

C.P = S.P × 100/(100 – L%)

S.P = C.P × (100 + P%)/100

Where,

C.P → Cost price

S.P → Selling price

L% → Loss%

P% → Profit%

**Calculations:**

C.P = S.P × 100/(100 – L%)

⇒ C.P = 1200 × 100/(100 – 20)

⇒ C.P = 1200 × 100/80

⇒ C.P = 1500

S.P of the item for 5% profit.

S.P = 1500 × 105/100

⇒ 1575

**∴ The required selling price is Rs. 1575**