Profit earned by selling an article for Rs.1060 is 20% more than the loss incurred by selling the article for Rs.950. At what price should the article be sold to earn a 20% profit?
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Rs. 1200
Profit = selling price − cost price and loss = cost price − selling price, so both the profit and the loss can be written in terms of the cost price and equated as the question says.
The profit and the loss (in terms of the cost price):
Cost price \(=x\)
Profit on selling for Rs 1060: \(1060-x\)
Loss on selling for Rs 950: \(x-950\)
Finding the cost price (the profit is 20% more than the loss):
\(1060-x=1.2(x-950)=1.2x-1140\)
\(1060+1140=x+1.2x\)
\(2200=2.2x\), so \(x=1000\)
The selling price (for a 20% profit):
\(1000\times1.2=\) Rs 1200