A milkman sells milk of a profit of 20% and also mix 1/8 water in pure milk. Find the overall profit percent of shopkeeper.

Let milk cost = 10/kg. Profit 20% means selling price = 12/kg. For 8 units (7 milk + 1 water): Cost = 7×10 = 70. Revenue = 8×12 = 96. Profit = 96-70 = 26. Profit% = (26/70)×100 = 37.14%. Wait, let me recalculate. For 8kg mixture at 12/kg: 96 revenue. Cost is only for 7kg milk at 10/kg = 70. Profit = 26. 26/70 = 37.14%. But option says 35%. Let me verify: If base milk is 1 unit at C, selling at 1.2C. Adding 1/8 water means for 8/7 units of mixture (7/7 milk + 1/7 water), revenue = (8/7)×1.2C = 1.371C. Cost = C. Profit = 37.14%. Hmm, closest to 35%. Actually: 8 units mixture sells for 8×12=96. Cost of 7 units milk = 7×10=70. Profit=26. 26/70=37.1%. Option D (35%) is closest.