P sold an item for ₹70 and earned 100% profit. What should be the selling price of the item to earn 150% profit?
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → ₹87.50
A profit percentage is always taken on the cost price, so the cost price is found first from the given sale, and the new selling price is then built on it.
A 100% profit means the selling price is twice the cost price: \(2\times\text{CP}=70\), so CP \(=\) ₹35
For a 150% profit, the selling price is 250% of the cost price: \(\displaystyle \frac{250}{100}\times35=87.50\)
Shortcut: With the cost price fixed, the selling price is proportional to (100 + profit%).
\(\displaystyle 70\times\frac{100+150}{100+100}=70\times\frac{250}{200}=87.50\)