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When the selling price of an article is increased by 20% and the cost

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Senior Manager
Joined: 29 Nov 2018
Posts: 280
Concentration: Marketing, Strategy
When the selling price of an article is increased by 20% and the cost  [#permalink]

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26 Mar 2019, 09:22
2
00:00

Difficulty:

55% (hard)

Question Stats:

55% (02:29) correct 45% (02:23) wrong based on 20 sessions

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When the selling price of an article is increased by 20% and the cost remains the same, the profit increases by 50%. Find the profit percentage at which the item was being sold originally.

(1) 25%
(2) 33.33%
(3) 40%
(4) 50%
(5) 66.66%
Intern
Joined: 24 Jun 2018
Posts: 35
Re: When the selling price of an article is increased by 20% and the cost  [#permalink]

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26 Mar 2019, 10:10
Let the original cost price of the item be x.

Let the original Selling price of the item be 100.
After increasing the SP by 20%, SP becomes 120.

Now, we know the profit increases by 50% when the SP has been increased.

Hence => Original Profit + 50% x Original Profit = New Profit
=> 1.5xOriginal Profit = New Profit {Since 50% = 50/100 = .5}

=> 1.5 x (Original SP - CP) = (New SP - CP)

=> 1.5 x(100-x) = (120 - x)
=> 150 - 1.5x = 120 - x
=> 30 = .5x
=> x=300/5

=> x = 60 ie. Cost Price is 60.

We now need to calculate the original profit % which is given by

(SP-CP)/CP x 100

=(100-60)/60 x 100

= 66.67%

Hence Option E
Re: When the selling price of an article is increased by 20% and the cost   [#permalink] 26 Mar 2019, 10:10
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When the selling price of an article is increased by 20% and the cost

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