Profit, Loss and Discounts - XAT 2020 Practice Questions

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

A merchant marks his goods up by 60% and then offers a discount on the marked price. If the final selling price after the discount results in the merchant making no profit or loss, what was the percentage discount offered by the merchant?

1. 60%
2. 40%
3. 37.5%
4. Depends on the cost price

Correct Answer - 37.5% discount. Choice (3)

Explanatory Answer

Assume the cost price to be 100.
Therefore, the merchant's marked price will be 100 + 60% of 100 = 160

Now, the merchant offers a discount on the marked price. The discount results in the merchant selling the article at no profit or loss or at the cost price.

That is the merchant has sold the article at 100.

Therefore, the discount offered = 60.

Discount offered is usually measured as a percentage of the marked price.

Hence, % discount =

Correct answer choice (3)