In a certain store, the profit of an article is 380% of the cost. If the cost increases by 20% but the selling price remains the same, what percentage of the selling price is the profit:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → 75%
The selling price does not change, so it is worked out first from the old cost; the new profit is then compared with that same selling price.
Assuming the original cost to be 100:
Profit \(=380\), so the selling price \(=100+380=480\)
New cost \(=100+20\%\) of \(100=120\)
New profit \(=480-120=360\)
Profit as a percentage of the selling price \(=\frac{360}{480}\times100=75\%\)