X sold an article to Y at a profit of 18%. Later on, Y sold it back to X at a profit of 40%, thereby gaining ₹118. How much did X pay for the article originally?
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → ₹250
Each profit is worked out on the cost price of the person who sells: X’s profit on what X paid, Y’s profit on what Y paid. The ₹118 is Y’s gain.
Assuming X paid ₹\(x\):
Y’s cost price (X’s profit of 18%) \(=1.18x\)
Y’s gain (40% of Y’s cost) \(=0.40\times1.18x=0.472x\)
\(0.472x=118\), so \(\displaystyle x=\frac{118}{0.472}=250\)