On a particular transaction, a shopkeeper earns 400% on cost. If the cost rises by 100% and the selling price remains unchanged, the ratio between the new profit and the selling price is:
Answer & explanation
Correct answer: option 3
Let the cost price = 100
Earnings = 400%
Then the selling price = 500
According to the question,
CP SP
Old 100 500
New 200 500
New profit = 500 - 200 = 300
New profit : Selling Price = 300 : 500 = 3 : 5