When a watch is sold at $\frac{7}{8}$th of the marked price, there is a profit of 25%. At what percentage more than the cost price has the marked price of the watch been fixed? [Give your answer correct to 2 decimal places.]
Answer & explanation
Correct answer: option 2
25% = \(\frac{1}{4}\)
Let marked price = 800x
So , Selling price = \(\frac{7}{8}\) × 800x = 700x
Ratio of CP : SP = 4 : 5
Now , 5R = 700x
1R = 140x
4R = 4 × 140 = 560x
Increased percentage = \(\frac{800x - 560x}{560x}\) × 100
= \(\frac{240x}{560x}\) × 100
= 42.857%
= 42.86% (approx)