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Discount and Profit Percentage

CAT 2017 Slot 1 · Quantitative Ability · Easy · Profit and Loss

This is an easy Quantitative Ability question from the CAT 2017 Slot 1 paper. It tests Profit and Loss. The full answer key and a step-by-step explanation are below — try it yourself first, then reveal the solution.

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If a seller gives a discount of 15%15\% on retail price, she still makes a profit of 2%2\%. Which of the following ensures that she makes a profit of 20%20\%?

  1. A.

    Give a discount of 5% on retail price

  2. B.

    Give a discount of 2% on retail price

  3. C.

    Increase the retail price by 2%

  4. D.

    Sell at retail price

Answer

D

Explanation

Let Cost Price CP=100CP = 100. Selling Price at 2%2\% profit = 102102. Since discount is 15%15\%, 0.85×MP=102  ⟹  MP=1200.85 \times MP = 102 \implies MP = 120. To make a 20%20\% profit, SPSP must be 120120. Since MP=120MP = 120, selling at retail price (MPMP) yields 20%20\% profit.

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