Question

An item is sold for 504 after allowing a 20% discount. If the shopkeeper gains 5%, then the cost price of the item is:

• A. 120
• B. 135
• C. 150
• D. 160

Answer 1

The Correct Option is C

Let the marked price be \(MP\) and the cost price be \(CP\). The selling price (SP) is ₹504.

The discount is 20%, so the selling price is 80% of the marked price: \(0.8 \times MP = 504\). Therefore, \(MP = \frac{504}{0.8} = 630\).

There is a 5% profit, so the selling price is 105% of the cost price: \(1.05 \times CP = 504\). Therefore, \(CP = \frac{504}{1.05} = 480\).

The difference between the marked price and the cost price is \(MP - CP = 630 - 480 = 150\).

Answer 2

Let the cost price be $x$. 

The selling price is $x + 0.05x = 1.05x$. 

The marked price after a 20% discount is $504 = 0.8 \times \text{Marked Price}$. 

Solving for $x$ gives the cost price as 150.