Multiple choice

A shopkeeper buys an article for Rs. 2,400 from a wholesaler at 20% rebate on its list price. He marks up the list price of the article bought by 10% and then sells it for Rs. 3,498 including sales tax on the marked-up price. Find (i) the rate of sales tax (ii) the shopkeeper's profit as per cent.

  1. (i) 6%        (ii) 37.5%

  2. (i) 5%        (ii) 38.5%

  3. (i) 4%        (ii) 39.5%

  4. (i) 3%        (ii) 40.5%
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

List price = 2400 / 0.8 = 3000. Marked up price = 3000 * 1.1 = 3300. Sold for 3498. Sales tax = 3498 - 3300 = 198. Tax rate = 198/3300 = 6%. Profit = 3300 - 2400 = 900. Profit % = 900/2400 = 37.5%.

AI explanation

The shopkeeper buys the article for 2400 at a 20 percent rebate on the list price, meaning the list price is 2400 divided by 0.8, which is 3000. He marks the price up by 10 percent to 3300, and sells it for 3498 including sales tax. The sales tax amount is 3498 minus 3300, which is 198, so the sales tax rate is 198 divided by 3300 multiplied by 100, resulting in 6 percent. The profit is the selling price excluding tax minus the cost price, which is 3300 minus 2400, giving 900, so the profit percentage is 900 divided by 2400 multiplied by 100, resulting in 37.5 percent.

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