An item is sold for ₹504 after allowing 20% discount and still a profit of 5% has been earned. The marked price is how much more than the cost price?
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → ₹150
The selling price of ₹504 is linked to both other prices: the discount is taken on the marked price and the profit is worked out on the cost price.
After a 20% discount the item sells at 80% of the marked price: \(\displaystyle \text{MP}=\frac{504\times100}{80}=630\)
A 5% profit means it sells at 105% of the cost price: \(\displaystyle \text{CP}=\frac{504\times100}{105}=480\)
Difference \(=630-480=\) ₹150