Question:

A dealer buys an article for Rs. 380.00. What price should he mark so that after allowing a discount of 5% he still makes a profit of 25% on the article?

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Discount is on the marked price, profit is on the cost price. Set 380 times 1.25 equal to MP times 0.95 and solve for MP.
Updated On: Jul 17, 2026
  • Rs. 500
  • Rs. 475
  • Rs. 95
  • Rs. 465
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The Correct Option is A

Solution and Explanation

Step 1: Sort out the three prices.
Cost price (CP) is what the dealer pays: Rs. 380.
Marked price (MP) is the tag price, which is what we must find.
Selling price (SP) is what the customer actually pays after the discount.
Discount is always taken on the marked price, and profit is always taken on the cost price. Mixing these two bases is the usual mistake here.

Step 2: Find the selling price from the profit condition.
A 25% profit means \[ SP = CP \times \left(1 + \frac{25}{100}\right) = 380 \times \frac{5}{4} \]
\[ SP = 475 \]
So the dealer must actually receive Rs. 475.

Step 3: Link the selling price to the marked price.
A 5% discount means the customer pays 95% of the marked price:
\[ SP = MP \times \left(1 - \frac{5}{100}\right) = MP \times \frac{19}{20} \]

Step 4: Solve for the marked price.
\[ 475 = MP \times \frac{19}{20} \]
\[ MP = 475 \times \frac{20}{19} = 25 \times 20 = 500 \]

Step 5: Verify the full chain.
Mark at Rs. 500, give 5% off: discount is \( 500 \times 0.05 = 25 \), so SP is Rs. 475.
Profit is \( 475 - 380 = 95 \), and \( \frac{95}{380} \times 100 = 25\% \). Both conditions hold.

Step 6: Why the other options are wrong.
Rs. 475 is the selling price, not the marked price. Choosing it means forgetting the discount step.
Rs. 95 is only the profit amount in rupees.
Rs. 465 gives SP \( = 465 \times 0.95 = 441.75 \), a profit of about 16.3%, not 25%.

Final Answer:
The article should be marked at Rs. 500. \[ \boxed{\text{Rs. } 500} \]
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