If a discount of 10% is allowed on the marked price of an article, a shopkeeper gets a profit of 25%. If he offers a discount of 25% on the same article, then his profit or loss percentage will be:
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → \(4\frac{1}{6}\)% profit
The cost price and the marked price do not change. The first sale links the marked price to the cost price; the second sale is then worked out from that link.
Let the cost price be Rs 100; first selling price \(=\) Rs 125
90% of the marked price \(=125\), so marked price \(\displaystyle =\frac{125}{0.9}=\frac{1250}{9}\) rupees
Selling price at a 25% discount \(\displaystyle =0.75\times\frac{1250}{9}=\frac{625}{6}=104\frac{1}{6}\) rupees
This is more than the cost price of Rs 100, so it is a profit of \(\displaystyle 104\frac{1}{6}-100=4\frac{1}{6}\)%
He still makes a profit of \(4\frac{1}{6}\)%.