Multiple choice

A trader earns a profit of 20% after giving a discount of 20% on the marked price. How much percent should he reduce his marked price so that he can get a profit of 19 % after giving a discount of 12.5% on the new marked price?

  1. 6%

  2. 7%

  3. 9.33%

  4. 7.5 %

  5. 8.97%
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Let CP=100. Original: MP such that 20% discount gives 20% profit. 100 = MP×0.8, so MP=125. New scenario: need 19% profit after 12.5% discount. Let new MP = 125(1-x). Then 125(1-x)×(1-0.125) = 119. Solving: 125(1-x)×0.875 = 119, so 125(1-x) = 136, thus x = 9/96 = 9.33%. Option D (7.5%) is too small, while option A (6%) is much smaller than needed.

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