Question

A shopkeeper marks his goods 40% above cost price and offers a discount of 20%. What is his overall profit percentage?

• A. 8%
• B. 12%
• C. 20%
• D. 28%

Hint:

Apply discount on marked price, not on cost price.

Answer 1

The Correct Option is B

To determine the overall profit percentage for the shopkeeper, we follow these steps:

1. First, let's understand the terms clearly:
   • The Cost Price (CP) is the original price at which the shopkeeper bought the goods.
   • He marks the goods 40% above the cost price. This gives the Marked Price (MP).
   • He then offers a 20% discount on this marked price to arrive at the Selling Price (SP).
2. Assume the Cost Price (CP) to be 100 units.
   • The Marked Price (MP) is 40% above CP: \[ MP = 100 + \frac{40}{100} \times 100 = 140 \]
3. A discount of 20% is offered on the marked price:
   • The discount amount is: \[ \text{Discount} = \frac{20}{100} \times 140 = 28 \]
   • Thus, the Selling Price (SP) after discount is: \[ SP = MP - \text{Discount} = 140 - 28 = 112 \]
4. Calculate the profit made by the shopkeeper:
   • \[ \text{Profit} = SP - CP = 112 - 100 = 12 \]
5. Finally, calculate the profit percentage:
   • \[ \text{Profit Percentage} = \left(\frac{\text{Profit}}{CP}\right) \times 100 = \left(\frac{12}{100}\right) \times 100 = 12\% \]

Therefore, the overall profit percentage for the shopkeeper is 12%.