Multiple choice

A trader sells his goods after giving discount of 25% on the marked price of the goods. He made profit of 20% in this transaction. What is the mark up percentage of the goods?

  1. 60%

  2. 50%

  3. 40%

  4. 35%

  5. 30%
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A Correct answer
Explanation

Let CP = 100, Profit = 20%, so SP = 120. SP = MP * (1 - 0.25) = 0.75 * MP. MP = 120 / 0.75 = 160. Markup % = ((160 - 100) / 100) * 100 = 60%.

AI explanation

Assume the cost price is 100, which means the selling price after a 20% profit is 120. This selling price represents 75% of the marked price since a 25% discount was given. Solving for the marked price using the formula Marked Price = Selling Price / 0.75 gives 120 / 0.75 = 160. The markup percentage is ((160 - 100) / 100) * 100, resulting in 60%.

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