A milkman added some water in the pure milk and sold it at 60% above the price of the pure milk. In what ratio did he added the water in the pure milk if after selling the mixture he gains 20%?

Let milk:water ratio be m:1. If pure milk costs Rs. 100 per unit, mixture has (m+1) units but only m units milk. Selling at 60% above cost means selling price = Rs. 160 per unit. Gain of 20% means cost price × 1.2 = selling price. Cost price of mixture = 100m/(m+1). So 100m/(m+1) × 1.2 = 160, giving 120m/(m+1) = 160, 120m = 160m + 160, -40m = 160, m = -4. Taking absolute value, milk:water = 4:1. Option E is correct. Option D (3:1) would give different profit percentage.