An article is sold at 20% profit. If its cost price is increased by $5

Solution:

Let the original cost of the article be c. Since the article is sold at a 20% profit, the profit is 0.2c, and the sale price is 1.2c.

If the cost is increased by $50 and the selling price is increased by $30, then the new profit is (1.2c + 30) - (c + 50) = 0.2c - 20.

We are also told that the profit decreases by 10/3 %; thus, the new profit is 20 - 10/3 = 50/3 %.

Recall that the new cost is c + 50 and the new profit is 0.2c - 20; thus, in terms of c, the percentage of profit is [(0.2c - 20) / (c + 50)] * 100. Let’s set this expression equal to 50/3:

[(0.2c - 20)/(c + 50)] * 100 = 50/3

(0.2c - 20)/(c + 50) = 50/300 = 1/6

1.2c - 120 = c + 50

0.2c = 170

c = 170/0.2 = $850

Answer: B

Profit = SP - CP

or

Profit % = (SP-CP)/CP * 100

Hope it helps!

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