Discount given by a merchant on the marked price of goods is 25% more than the profit% earned on it. If discount is reduced by 20% profit is increased by 40% and becomes 28%. Find the actual cost price of the goods if the marked price is Rs 320.

Let profit% = p, discount% = d. Given d = 1.25p (25% more than profit). If discount reduced by 20%, new discount = 0.8d = 0.8(1.25p) = p. Profit increases by 40% and becomes 28%, so 1.4p = 28, giving p = 20%. Then d = 1.25 × 20 = 25%. Selling price at original discount = 320(1 - 0.25) = 240. Original profit = 20%, so Cost Price = 240/1.2 = 200. Verifying: If discount = 25%, SP = 320 × 0.75 = 240, Profit = 40, Profit% = 40/200 = 20%. Reduced discount = 25 × 0.8 = 20%, New SP = 320 × 0.8 = 256, New profit = 56, New profit% = 56/200 = 28% ✓.