Question

The marked price of an item is Rs.120. If it is sold at \(10\%\) discount, the profit earned is \(20\%\). What is the cost price of the item?

• A. Rs.84
• B. Rs.90
• C. Rs.78
• D. Rs.96

Answer 1

The Correct Option is B

Cost Price Calculation 

- Let the cost price of the item be denoted as C.

- The selling price after a 10% discount on the marked price is calculated as follows:

\[ \text{Selling Price} = 120 - 10\% \text{ of 120} \] \[ = 120 - 12 = 108 \]

- Since the profit earned is 20%, we know the relationship:

\[ \text{Selling Price} = \text{Cost Price} + \text{Profit} \]

Substituting the values:

\[ 108 = C + 20\% \text{ of } C \] \[ 108 = C + 0.20C = 1.20C \]

- Solving for C:

\[ C = \frac{108}{1.20} = 90 \]

Thus, the cost price of the item is Rs. 90.

Conclusion: The correct answer is (b) Rs. 90.