A wholesaler sells a jacket to a retailer at a profit of 5% and the retailer sells it to a customer at a profit of 10%. If the customer pays ₹4,158 for the jacket, then what was the cost price of the jacket for the wholesaler ?
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → ₹3,600
Each profit is taken on the cost price of the person who sells: the wholesaler’s selling price is the retailer’s cost price. Two successive profits of 5% and 10% therefore multiply the wholesaler’s cost by 1.05 and then by 1.10. Let the wholesaler’s cost price be \(x\):
Retailer’s cost price \(=1.05x\)
Customer’s price \(=1.10\times1.05x=1.155x\)
The customer pays ₹4,158, so \(1.155x=4158\)
\(\displaystyle x=\frac{4158}{1.155}=3600\), that is, ₹3,600