A shopkeeper marked his goods 40% higher than their cost price and allows 20% discount on every item. Find his net profit percentage.
Answer & explanation
Correct answer: option 3
Cost Price = C
Marked Price (M) is 40% higher = 1.4C
Discount on M is 20%= 0.2*M
Selling Price = M-0.2M = 0.8M
Profit = 0.8M-C = 0.8*(1.4C) - C = 1.12 C
Profit% = 1.12C *100 / C = 12
The correct answer is Option (3) → 12%