Question

After allowing 20% cash discount, a trader still earns a profit of 11.11%. How much above the cost price did the trader mark his goods?

• A. 40%
• B. 30.33%
• C. 28%
• D. 38.88%

Hint:

Always assume cost price as \rupee100 when dealing with percentage-based profit and discount problems. It simplifies calculations.

Answer 1

The Correct Option is D

Step 1: Let the cost price (C.P.) be ₹100.
Profit = 11.11% → Selling price (S.P.) = ₹111.11
Step 2: Let the marked price (M.P.) be ₹x.
Cash discount = 20% → S.P. = \( x - 20\% \, \text{of} \, x = 0.8x \)
\[ \Rightarrow 0.8x = 111.11 \Rightarrow x = \frac{111.11}{0.8} = 138.8875 \] Step 3: Percentage above cost price =
\[ \frac{M.P. - C.P.}{C.P.} \times 100 = \frac{138.88 - 100}{100} \times 100 = 38.88\% \]