Multiple choice

A person sold an article at 20% profit on the selling price. Afterwards, when the cost price is reduced by 10%, he also reduces the selling price by 10%. His percentage profit on cost price will be

  1. 30

  2. 25

  3. 22.5

  4. 12.5
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Let CP = 100. Selling price (SP) is such that 20% of SP is profit, so Profit = 0.2*SP. Since Profit = SP - CP, we have 0.2*SP = SP - 100, leading to 0.8*SP = 100, so SP = 125. After 10% reduction, new CP = 90 and new SP = 125 * 0.9 = 112.5. Profit = 112.5 - 90 = 22.5, and profit percentage on cost = (22.5/90)*100 = 25%.

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