A shopkeeper pays 12% of the cost price as tax while purchasing an item whose cost is ₹ 500. He wants to earn a profit of 20% after giving a discount of 16% on the marked price. So, the marked price should be:
Answer & explanation
Correct answer: option 4
Cost price of the article = 500
Tax = 12%
Then the actual cost price for the shopkeeper = 112% of 500 = 560
He wants to earn a profit of 20% after giving a discount of 16% on the marked price =
Now according to the question the marked price = 560 × \(\frac{120}{100}\) × \(\frac{100}{84}\) = 800