Question

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 $20\%$?

Accepted Answer

D. Let Cost Price $CP = 100$. Selling Price at $2\%$ profit = $102$. Since discount is $15\%$, $0.85 	imes MP = 102 \implies MP = 120$. To make a $20\%$ profit, $SP$ must be $120$. Since $MP = 120$, selling at retail price ($MP$) yields $20\%$ profit.

Discount and Profit Percentage

Explanation

Practise this under exam conditions