If a seller gives a discount of 15% on retail price

Question

If a seller gives a discount of 15% on retail price, she still makes a profit of 2%. Which of the following ensures that she makes a profit of 20%?

A.Give a discount of 5% on retail price
B.Give a discount of 2% on retail price
C.Increase the retail price by 2%
D.Sell at retail price
E.None of the above

MeenakshiS · Answer

Hi Kaushik786,

Could you please provide the answer explanation. I got it wrong.

Thanks in advance.

Meenakshi

shameekv1989 · Answer

Let Buying price = 100
Therefore SP after discount would be 102

SP = 85/100 (Retail Price) = 102

Retail Price will, therefore, be 120

In order to make 20% profit he needs to sell it Retail Price itself.

Answer - D

MeenakshiS · Answer

Thank you Shameekv1989.

CrackverbalGMAT · Answer

This is a simple question on the topic of Profit, Loss and Discount.

To work out this problem, let us remember that SP = CP (1+ \frac{p}{100} ) where ‘p’ represents the profit percentage. SP = MP(1- \frac{d}{100} ) where MP represents the Marked Price (or also known as Retail price) and ‘d’ represents the discount percentage.

Let the MP be 100x. Then,

Amount of discount given = 15% of 100x = 15x. Therefore, SP = MP – Discount = 85x. This 85x represents 2% more than the cost price since there was a 2% profit.

That is, 85x = 102% of the CP. Therefore,

CP =  \frac{85x * 100 }{ 102} . Notice that 85 and 102 are both multiples of 17. This is an indicator that you will be able to cancel off these numbers and obtain a neat little number for CP which can be dealt further (rather than ending up with vulgar decimals); this should tell you that you are on the right track.

CP =  \frac{500x }{ 6}  or CP =  \frac{250x }{ 3} .

If she wants to make a profit of 20%, her selling price should be 120% of the CP. This means,

Intended selling price =  \frac{6}{5}  *  \frac{250x }{ 3}  = 100x. This is the MP (or the retail price) we assumed at the start. This means that she has to sell the article AT RETAIL PRICE to obtain a 20% profit.

The correct answer option is D .

Hope that helps!

MeenakshiS · Answer

Thank you Aravind,
Your explanation made it more clear to me.

Mansoor50 · Answer

chetan2u 
after 15% discount, sp is 85, assuming sp was a 100

we find the cp using: (85-cp)/cp = 0.02 --> this gives us cp as an ugly fraction, which is 85/1.02. 
lets ignore that ugly fraction and call it cp

to make a 20% profit

(sp-cp)/cp = 0.2
and solving for sp we get 1.2cp

this tells us that we have to sell at sp to make a 20% profit

which bring me to my question:

could we have just said that we need to sell at the retail price to make 20% profit? seeing how that ugly cp fraction is never used?

Abhishek009 · Answer

Create a table as under Capture.PNG Answer must be (D)

fireagablast · Answer

Let retail price be 100
100*(100-15/100) = 85
Ratio is sell at 85, get 102
85:102 = x:120

85/102 = x/120
x=100

100 is the same as retail price, so to make 20%, need to sell at retail price

Archit3110 · Answer

let SP be 100
15% discount will be 85
still a profit of 2% is made i.e. retail price must have been 102 
so as to make profit of 20% ; selling price has to be 85*1.2 ; 102

option D

Kinshook · Answer

Given; If a seller gives a discount of 15% on retail price, she still makes a profit of 2%. 
Asked: Which of the following ensures that she makes a profit of 20%?

Let the retail price be x and cost price be y.

At 15% discount 
(100%-15%)x = .85x = 1.02y

For 20% profit 
(100%+20%)y = 1.2y = .85x/1.02*1.2 = x

To generate 20% profit, he should sell at retail price

IMO D

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If a seller gives a discount of 15% on retail price

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