A shopkeeper buys a table for Rs 850 and marks it at Rs 1,200. He sells it after a discount of 15% on the marked price.
Consider the following statements:
I. The selling price of the table is Rs 1,020.
II. The shopkeeper makes a profit of 20%.
III. If the discount were 20% instead of 15%, the shopkeeper would make a loss.
Which of the above statements is/are correct?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → I and II only
Discount is taken on the marked price; profit is taken on the cost price.
I. The selling price of the table is Rs 1,020. — Correct. A 15% discount on Rs 1,200 leaves Rs 1,020.
Discount \(=15\%\) of 1200 \(=\) Rs 180
SP \(=1200-180=\) Rs 1020
II. The shopkeeper makes a profit of 20%. — Correct. The profit of Rs 170 is 20% of Rs 850.
Profit \(=1020-850=\) Rs 170
Profit % \(=\displaystyle\frac{170}{850}\times100=20\%\)
III. If the discount were 20% instead of 15%, the shopkeeper would make a loss. — Incorrect. The selling price would still be above the cost price.
SP with a 20% discount \(=1200\times0.80=\) Rs 960
Rs 960 is more than Rs 850, so he would still make a profit of Rs 110