Multiple choice

A trader marks his goods at 20% above the cost price. If he allows a discount of 5% on the marked price, what profit percent does he make?

  1. 14%

  2. 16%

  3. 18%

  4. 20%
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Marked price = 120% of cost. Selling price = 95% of marked = 0.95 × 1.20 = 1.14 of cost = 114% of cost. Profit = 14%. The 20% markup and 5% discount compound multiplicatively.

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