Multiple choice

A trader buys good at $20\%$ discount on marked price. If he wants to make a profit of $25\%$ after allowing a discount of $20\%$. By what percent should his marked price be greater than the original marked price?

  1. $15\%$
  2. $65\%$
  3. $25\%$
  4. $20\%$
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Let marked price be M. Cost price = 0.8M. To get 25% profit, selling price = 1.25 * 0.8M = 1M. If he allows 20% discount on new marked price M', then 0.8M' = 1M, so M' = 1.25M. The increase is 25%.

AI explanation

Assume the original marked price is 100, so the trader buys the item for 80 after the 20 percent discount. To make a 25 percent profit, his selling price must be 80 * 1.25 = 100. Since he gives a 20 percent discount on his new marked price, this selling price of 100 represents 80 percent of his new marked price, making his new marked price 100 / 0.80 = 125. This new marked price of 125 is 25 percent greater than the original marked price of 100.

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