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

of marked price = 120

Or marked price =

Or Markup = 50%

Correct answer choice (3)

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