Profit, Loss and Discounts - XAT 2020 / TANCET 2020

The question is a sample practice problem in profit, loss, discounts.

Question

A trader buys goods at a 19% discount on the label price. If he wants to make a profit of 20% after allowing a discount of 10%, by what % should his marked price be greater than the original label price?

1. +8%
2. -3.8%
3. +33.33%
4. None of these

Correct Answer - 8% profit. Choice (1)

Explanatory Answer

Let the label price be = Rs.100. The trader buys at a discount of 19%.
Hence, his cost = 100 - 19 = 81.

He wants to make a profit of 20%. Hence his selling price = 1.2 (81) = 97.2

However, he wants to get this Rs.97.2 after providing for a discount of 10%. i.e. he will be selling at 90% of his marked price.

Hence, his marked price M = = 108 which is 8% more than the original label price.


Correct answer choice (3)

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