Pure milk costs Rs. 16 per litre. After adding water the milkman sells the mixture at the rate of Rs. 15 per litre and thereby makes a profit. of 25%. In what respective ratio does he mix milk with water ?
Profit = 25% hence effective Cost Price = Selling Price * $$\frac{8}{10}$$ or Selling Price - 20%
Thus Effective Cost Price = Rs 12 per litre
(It can be said that the farmer is adding the Milk equivalent of Effective Cost Price and Water equivalent of Initial - Effective Cost Price)
Ratio = $$\frac{Effective Cost Price}{Initial - Effective Cost Price}$$
Ratio = $$\frac{12}{4}$$ = 3:1
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