By selling a T-shirt on marked price of 650, a shopkeeper gains 25%. During a clearance sale, the shopkeeper allows a discount of 20% on the marked price. What is the overall profit/loss?

No profit, no loss

The correct answer is Option (3) → No profit, no loss

1. Find the Cost Price ($CP$):

We are told that selling the T-shirt at the marked price ($MP$) of $650$ results in a $25\%$ gain.

$SP_1 = CP + 25\% \text{ of } CP = 1.25 \times CP$

$650 = 1.25 \times CP$

$CP = \frac{650}{1.25} = 520$

2. Find the Sale Selling Price ($SP_2$):

During the clearance sale, a $20\%$ discount is given on the marked price ($650$).

$SP_2 = MP - 20\% \text{ of } MP$

$SP_2 = 650 \times (1 - 0.20)$

$SP_2 = 650 \times 0.80 = 520$

3. Determine Profit or Loss:

• Cost Price ($CP$): $520$
• Sale Price ($SP_2$): $520$

Since the Selling Price during the sale is exactly equal to the Cost Price ($520 = 520$), there is no profit and no loss.