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