Multiple choice

The cost price of a product increases by 10%, but the selling price of the product does not change and the profit decreases by 20%. What is the present profit percentage earned on the product?

  1. 25%

  2. 33.33%

  3. 36%

  4. 36.36%

  5. 44.54%
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Let CP=100, SP=S, Profit=P=S-100. New CP=110, New Profit=0.8P=S-110. P = S-100 => S=P+100. Substitute: 0.8P = P+100-110 = P-10. 0.2P = 10, P=50. Original profit = 50%. New profit = 0.8*50 = 40. New CP = 110. Profit % = (40/110)*100 = 36.36%.

AI explanation

Let the original cost price be 100, meaning the new cost price is 110. If the new profit is P, the selling price equation is 110 + P = 100 + 1.25P, because a 20% drop in profit implies the original profit was 1.25P. Solving this equation gives P = 40, meaning the profit of 40 on the new cost price of 110 is 36.36%.

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