A firm dealing in furniture allows 4% discount on the marked price of each item. What price must be marked on a dining table that costs Rs. 400 to assemble, so as to make a profit of 20%?

We know that profit is counted on the cost price and discount is counted on the marked price. Now, the cost of assembling is Rs 400. So, the selling price has to have a 20% profit after 4% discount on the marked price. Then, SP (selling price) after discount = 400 * 120/100 = 480 Now, let us assume the marked price is X and is discounted at 4%. So, X * 96/100 = 480, i.e. X = 500. Option 4 is correct.