A man bought a mobile and paid 20% less than its marked price. He sold it at 45% profit on the price he had paid. The percentage of profit earned by him on the marked price was:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → 16
The 45% profit is worked out on the price he paid, but the question asks how far his selling price is above the marked price, as a percentage of the marked price.
Assuming the marked price to be 100:
Price paid \(=100-20=80\) (20% less than the marked price)
Selling price \(\displaystyle=80\times\frac{145}{100}=116\) (45% profit on 80)
Profit on the marked price \(=116-100=16\), that is, 16%