Multiple choice

Anu fixes the selling price of an article at 25\% above its cost of production. If the cost of production goes up by 20\% and she raises the selling price by 10\%, then her percentage profit is (correct to one decimal place):

  1. $16.4\%$
  2. $14.6\%$
  3. $13.8\%$
  4. $15.2\%$
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Let original cost = 100. Original SP = 125. New cost = 120 (20% increase). New SP = 137.5 (10% increase on 125). New profit = 137.5 - 120 = 17.5. Percentage profit = (17.5/120) × 100 = 14.58%, which rounds to 14.6%.