Question

A trader buys goods from Delhi to sell in Bombay, where he gets a price realisation \(20\%\) higher than the Delhi price. In each journey, he spends Rs. 2000 on travelling and Rs. 2500 as a bribe to the parcel authority, and still makes a net profit of Rs. 20,000. Find the total value of goods purchased by the dealer in 7 journeys to Delhi.

• A. Rs. 1,22,500
• B. Rs. 2,45,000
• C. Rs. 8,57,500
• D. None

Hint:

Write the trader's profit for one journey (20% markup minus Rs. 4500 in expenses equals Rs. 20,000), solve for the goods value in one journey, then multiply by 7.

Answer 1

The Correct Option is C

Step 1: Set up the cost price for one journey.
Let the value of goods the trader buys in Delhi, in one journey, be Rs. \(x\).
He sells these goods in Bombay at a price 20% higher, so the selling price is \(1.2x\).

Step 2: Write the profit equation for one journey.
His profit before expenses is \(1.2x - x = 0.2x\).
From this he pays Rs. 2000 for travel and Rs. 2500 as a bribe, a total expense of Rs. 4500.
So his net profit per journey is
\[ 0.2x - 4500 \]

Step 3: Use the given profit to find x.
We are told the net profit per journey is Rs. 20,000, so
\[ 0.2x - 4500 = 20000 \]
\[ 0.2x = 24500 \]
\[ x = 1,22,500 \]
This Rs. 1,22,500 is the value of goods bought in ONE journey; it matches option (1), but option (1) answers a different question, the value per single journey, not the value over 7 journeys.

Step 4: Scale up to 7 journeys.
Since the trader repeats the same purchase every journey, the total value of goods bought over 7 journeys is
\[ 7 \times 1,22,500 = 8,57,500 \]

Step 5: Check why the other options fail.
Option (1), Rs. 1,22,500, is the value for a single journey, not for 7 journeys, so it is a distractor.
Option (2), Rs. 2,45,000, is just twice Rs. 1,22,500; it does not correspond to 7 journeys at all.
Option (4), "None," is not needed since option (3) matches exactly.

Final Answer:
The total value of goods purchased over 7 journeys is Rs. 8,57,500. \[ \boxed{Rs.\ 8,57,500} \]