Question

A shopkeper declares a 20% discount on his goods and sells it at a profit of 25%. What is the cost price of the goods if the marked price quoted is Rs 2000

Answer 1

A 20% discount means you pay 80% of the marked price.

Why 80%? Well, 100% - 20% = 80%.

The discounted price is 80% times $2000.

Let D = discounted price

D = 0.80($2000) = $1600

What is profit?

Profit = (discounted price - cost)/cost

Let c = cost

We are looking for c.

($1600 - c)/c = 0.25

Multiply both sides by c.

$1600 - c = 0.25c

$1600 = 1.25·cosc

c = $1600/1.25 = $1280

Answer: $1280