Multiple choice

A merchant sells an item at a 20% discount, but still makes a gross profit of 20%. What would be the profit percentage if the item were sold without discount?

  1. 30%

  2. 40%

  3. 50%

  4. 60%

  5. 55%
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Let CP = 100. Selling Price (SP) = 120 (20% profit). This SP is after a 20% discount on Marked Price (MP). So, 0.8 * MP = 120 => MP = 150. If sold without discount, SP = 150. Profit = 150 - 100 = 50%.

AI explanation

Let the marked price be 100, so the selling price after a 20% discount is 80. Since this selling price still yields a 20% gross profit, the cost price is 80 / 1.2 = 66.67. If the item is sold without discount at the marked price of 100, the profit is 100 - 66.67 = 33.33. Therefore, the profit percentage is (33.33 / 66.67) * 100 = 50%.

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