Aman sells his goods at a certain price, 20% of which is profit. If his buying price increases by 10% and he sells the goods at a price 9% higher than before, what will be his profit percentage (approximately)?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → 23.86%
Here the 20% profit is a part of the selling price. Take the old selling price as Rs 100, find the old cost, then apply the two increases and take the new profit on the new cost.
Old selling price \(=\) Rs 100, profit \(=\) Rs 20
Old cost price \(=100-20=\) Rs 80
New cost price \(\displaystyle =80\times\frac{110}{100}=\) Rs 88
New selling price \(\displaystyle =100\times\frac{109}{100}=\) Rs 109
New profit \(=109-88=\) Rs 21
Profit % \(\displaystyle =\frac{21}{88}\times100=23.86\%\) (approximately)
His new profit is about 23.86%.