Multiple choice

The selling price of an article is 60% more than the profit made. If the profit on the article increases by 20%, while the selling price increases by 60%, then what is the percentage increase in cost price of the article?

  1. 105.50%

  2. 111.33%

  3. 126.67%

  4. 133.33%

  5. None of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Let SP = S, Profit = P, CP = C. S = 1.6P. Since S = C + P, C = S - P = 1.6P - P = 0.6P. New Profit P' = 1.2P. New SP S' = 1.6S = 1.6(1.6P) = 2.56P. New CP C' = S' - P' = 2.56P - 1.2P = 1.36P. Percentage increase in CP = ((1.36P - 0.6P) / 0.6P) * 100 = (0.76 / 0.6) * 100 = 126.67%.

AI explanation

Assume the initial profit is 100, which makes the initial selling price equal to 260 since it is 60 percent more than the profit, resulting in an initial cost price of 160. The new profit increases by 20 percent to become 120, and the new selling price increases by 60 percent to become 416. The new cost price is 416 minus 120, which is 296. The percentage increase in the cost price is (296 minus 160) divided by 160 multiplied by 100, giving 126.67 percent.

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