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.]

42.86%

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)