Discussion
A shopkeeper marked every item at 25% higher than its cost price. Then he offers 12% discount on the marked price. If an item is sold for ₹ 3,850, then how much profit did the shopkeeper earn ?
Answer: D
The profit is ₹ 350.
Let the cost price be C. The marked price is 1.25C, and after a 12% discount the selling price is 88% of that:
\[ \begin{aligned} SP &= 1.25C \times 0.88 = 1.1C \\ 1.1C &= 3850 \\ C &= 3500 \\ \text{profit} &= 3850 - 3500 = 350 \end{aligned} \]
So the overall profit is 10% of the cost. The common slip is to treat the net gain as 25% − 12% = 13%; successive percentage changes multiply, and 1.25 × 0.88 = 1.10, a gain of 10%.
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