Multiple choice

The marked price of an article is 40% higher than its cost price. Then the rate of discount, so that he gains 12% profit, is

  1. 20%

  2. 15%

  3. 21%

  4. 18%
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Let cost price = 100. Then marked price = 140 (40% higher). For 12% profit, selling price must be 112. Required discount = 140 - 112 = 28. Discount percentage = (28/140) × 100 = 20%. A 20% discount on the marked price yields a selling price that gives the desired 12% profit on cost.

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