Multiple choice

A merchant fixes the selling price of an article Rs. 1260 after adding 20% profit on the cost price. As sales were very low at this price, he decided to issue a gift card free of cost to every customer which will give 10% cashback of total shopping amount. If the cost of each card was Rs. 10 then how much profit the merchant made on each article after giving 10% cashback and adding the cost of gift card on that cashback?

  1. Rs. 74

  2. Rs. 84

  3. Rs. 94

  4. Rs. 104

  5. None of these
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Selling price after 20% profit = Rs. 1260. So cost price = 1260/1.2 = Rs. 1050. 10% cashback on Rs. 1260 = Rs. 126. Gift card cost = Rs. 10. Total reduction = Rs. 126 + Rs. 10 = Rs. 136. Net amount received = Rs. 1260 - Rs. 136 = Rs. 1124. Profit = Rs. 1124 - Rs. 1050 = Rs. 74.

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