Question 122

A dealer allows 25% discount on the marked price of an article and gains 20%. If the cost price of the article increases by 20%, how much discount percentage should he allow on the marked price so as to earn the same percentage of profit as before?

Solution

Let the initial cost price of the article be Rs.100.

profit = 20%

Selling price = 100$$ \times \frac{120}{100}$$ = 120

Discount = 25%

75% of MRP = 120

MRP = 120$$ \times \frac{100}{75}$$ = 160

Final cost price = 100 $$\times \frac{120}{100}$$ = 120

profit = 20%

Selling price = 120 $$\times \frac{120}{100}$$ = 144

Discount = 160 -144 = 16

Discount% = 16 $$\times \frac{100}{160} = 10%$$

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