A sells a bicycle to B at a profit of 25%, and B sells it to C at a profit of 12%. If C pays Rs 2,800 for it, how much did A pay for it?
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Rs 2,000
Each sale multiplies the price by its own factor; go back from C’s price by dividing by both factors.
Factors: \(1+\frac{25}{100}=1.25\) and \(1+\frac{12}{100}=1.12\)
A’s cost \(\times1.25\times1.12=2800\)
A’s cost \(=2800\div1.4=2000\)
A paid Rs 2,000.
Why the other options are incorrect
Option (1) Rs 2,240 — Incorrect. This undoes only A’s 25% profit; B’s 12% profit must also be taken out.
Option (2) Rs 2,500 — Incorrect. This is what B paid, not A.
Option (4) Rs 1,764 — Incorrect. This takes away 37% of C’s price; the profits are on different cost prices, so they must be undone one by one.