A trader weights 10% less than it should be and still the trader marks up his goods to get a profit of 25%. What is the markup on cost price?
Answer & explanation
Correct answer: option 3
Let the cost before weight adjustment = 100
Cost after 90% weight adjustment = 90
25 % profit on 90 = 90 × \(\frac{125}{100}\) = 112.5
Mark up on cost price = \(\frac{112.5 - 100}{100}\) x 100
= 12.5 %