TANCET, XAT Math sample questions, answers. Profits, discounts, Markup : TANCET MBA Entrance Study Material

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You are here: Home  »  XAT, TANCET Prep Questions »  Profits »   Question 14

TANCET - XAT Math Question : Profits

The question given below is a sample practice problem in Profits, Discounts and Markup. It is an Arithmetic Topic and the problem provides an understanding of the core concept related to profits and discounts.

Question

If a merchant makes a profit of 20% after giving a 20% discount, what should be his mark-up?
  1. 20%
  2. 40%
  3. 50%
  4. 60%
  5. 48%
Correct Answer - 50%. Choice (3)

Explanatory Answer

Assume cost price = 100.

As profit % = 20%, the profit made after the discount = 20% of 100 = Rs.20

So, selling price = Rs.120.

The merchant makes this profit of 20% after a discount of 20%.

Therefore, he is selling at Marked price - 20% of marked price = 80% of marked price.

i.e., 80% of marked price = Rs.120

80/100 of marked price = 120

Or marked price = 80/100

Or Markup = 50%

Correct answer choice (3)



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