Question

If the profit on the selling price is 20%, find the actual profit percentag

• A. 0.15
• B. 0.25
• C. 0.3
• D. 0.2
• E. None of these

Answer 1

The Correct Option is B

Step 1: Understand the problem.
We are given that the profit on the selling price is 20%. We are asked to find the actual profit percentage based on the cost price.

Step 2: Use the formula for profit percentage based on selling price.
Let the cost price be \( C \) and the selling price be \( S \). The profit percentage on the selling price is given as 20%.
Profit on selling price = \( \frac{{\text{Profit}}}{{\text{Selling Price}}} \times 100 = 20\%\).
This means:
Profit = \( 0.20 \times S \)

Step 3: Relate the profit to the cost price and selling price.
Profit is also given by:
Profit = \( S - C \) (since profit is the difference between the selling price and cost price).
So, we can write:
\( S - C = 0.20 \times S \)
\( S - 0.20 \times S = C \)
\( 0.80 \times S = C \)

Step 4: Find the actual profit percentage based on the cost price.
The actual profit is \( S - C \). Using \( C = 0.80 \times S \), we have:
Actual profit = \( S - 0.80 \times S = 0.20 \times S \)
The actual profit percentage based on the cost price is:
Actual profit percentage = \( \frac{{\text{Actual Profit}}}{{\text{Cost Price}}} \times 100 \)
Actual profit percentage = \( \frac{{0.20 \times S}}{{0.80 \times S}} \times 100 \)
Actual profit percentage = \( \frac{{0.20}}{{0.80}} \times 100 = 25\% \)

Step 5: Conclusion.
The actual profit percentage is 25%.

Final Answer:
The correct option is (B): 25%.