Question

A trader marked the price of his commodity so as to include a profit of \[25\%\]. He allowed a discount of \[16\%\] on the marked price. Calculate his actual profit?
(a). 5%
(b). 9%
(c). 16%
(d). 25%

Answer 1

- Hint: To solve this question we will first of all assume the cost price (CP) of the commodity and then proceed according to the given conditions in the question to calculate the Marked Price (MP).

Complete step-by-step solution -

Given that the trader marked the price of his commodity so as to include a profit of 25%. He allowed a discount of 16% on the marked price. We have to calculate the actual profit.
Let us assume that CP denotes cost price, SP denotes selling price, P denotes profit, P% is the profit percent, MP denotes marked price.
Let the cost price of the commodity be Rs 100
Therefore, after increasing the CP by 25%, the MP of the commodity will be Rs 125.
Given that the discount is 16%.
So, the amount of discount (D) can be obtained by calculating 16% of Rs. 125.
D= Rs. 20
Now the SP will be,
SP=MP-D
SP=125-20 = 105.
Therefore, we get the Selling price SP as Rs. 105.
Then the profit will be,
Profit = selling price – cost price
Gives profit = 105 – 100 = 5
Therefore, the profit percent can be calculated by the formula,
Profit % = profit divide by CP into 100
Substituting the values, we get,
Profit % =5
Profit % = 5%

So, the profit percent is 5% i.e. option (a).

Note: The possibility of error in these types of questions can be at a point where you use the selling price SP to calculate the profit percent. Because we have already calculated the final SP, hence we would not use the old assumed SP for further calculation.