Multiple choice

If a merchant offers a discount of 25% on the list price, he incurs a loss of 5%. What would be his profit or loss percentage if he sells at a discount of 10% of the list price?

  1. 5.5% loss

  2. 14% profit

  3. 50% profit

  4. 26% loss
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Let the list price be 100. A 25% discount gives a selling price of 75, which represents a 5% loss, meaning the cost price is 75 / 0.95 = 78.95. Selling at a 10% discount gives a selling price of 90, yielding a profit of 90 - 78.95 = 11.05, which is (11.05 / 78.95) * 100 = 14% profit.

AI explanation

Let the list price be Rs. 100, so a 25% discount makes the selling price Rs. 75, which is a 5% loss. This means the cost price is 75 divided by 0.95, which equals Rs. 600/7. If the article is sold at a 10% discount, the new selling price is Rs. 90. The profit percentage is ((90 - 600/7) / (600/7)) multiplied by 100, resulting in a 14% profit.

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