Question

A shopkeeper buys a product for $120 and marks it up by 25%. He then gives a 10% discount on the marked price. What is his final selling price?

• A. $132
• B. $135
• C. $138
• D. $140
• E.

Hint:

A common mistake is to simply add the markup percentage and subtract the discount percentage (e.g., 25% - 10% = 15%) and apply that to the original price. This is incorrect because the base for the markup (Cost Price) and the base for the discount (Marked Price) are different. Always perform the calculations sequentially.

Answer 1

The Correct Option is B

Step 1: Understanding the Concept:
This problem involves multiple percentage calculations related to pricing: a markup followed by a discount. It's crucial to apply the percentages to the correct base amount at each step.
Step 2: Key Formula or Approach:

Marked Price (MP) = Cost Price (CP) + (Markup % \(\times\) CP) = CP \(\times\) (1 + Markup %)

Final Selling Price (SP) = Marked Price (MP) - (Discount % \(\times\) MP) = MP \(\times\) (1 - Discount %)

Step 3: Detailed Explanation:
1. Calculate the Marked Price (MP):
[6pt] The cost price (CP) is $120.
The markup is 25% of the cost price.
Markup Amount: \[ 25% \text{ of } 120 = 0.25 \times 120 = $30 \] Marked Price (MP) = Cost Price + Markup Amount \[ MP = 120 + 30 = $150 \] 2. Calculate the Final Selling Price (SP):
[6pt] The discount is 10% of the marked price, not the cost price.
Discount Amount: \[ 10% \text{ of } 150 = 0.10 \times 150 = $15 \] Final Selling Price (SP) = Marked Price - Discount Amount \[ SP = 150 - 15 = $135 \] Step 4: Final Answer:
The final selling price of the product is $135.