Multiple choice

Directions: Solve the following question and mark the best possible option. If a seller gives a discount of 15% on retail price, she still makes a profit of 2%. Which of the following ensures that she makes a profit of 20%?

  1. Give a discount of 5% on retail price

  2. Give a discount of 2% on retail price

  3. Increase the retail price by 2%

  4. Sell at retail price
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Let CP = 100. Selling at 15% discount on retail price (RP) gives 2% profit, so 0.85 * RP = 102, RP = 120. To get 20% profit, SP must be 120. Since RP = 120, selling at retail price gives 20% profit.

AI explanation

Let the cost price be 100. Since a 15 percent discount on the retail price yields a 2 percent profit, the selling price is 102 and the retail price is 102 divided by 0.85, which equals 120. To achieve a 20 percent profit on the cost price of 100, the required selling price must be 120. Therefore, she must sell the items exactly at the retail price.

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