Multiple choice

If a merchant estimates his profits as 20% of the selling price, what is the real profit percent?

  1. $\frac{50}{3}\%$

  2. 25%

  3. 15%
  4. $\frac{100}{3}\%$
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Let selling price = 100. Profit = 20% of SP = 20. Cost price = SP - Profit = 100 - 20 = 80. Real profit percent = (Profit/CP) * 100 = (20/80) * 100 = 25%. Option A (50/3% = 16.67%) and C (15%) are common errors from mistakenly using SP as base instead of CP.

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