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A dealer marks his goods 20% above cost price. He then allows some discount on it and makes a profit of 8%. The rate of discount is:

Correct answer: B. 10%

  • A. 12%
  • B. 10%
  • C. 6%
  • D. 4%

Explanation

For a cost price of Rs. 100, the marked price is Rs. 120 and an 8% profit requires a selling price of Rs. 108. The discount is (Rs. 120 - Rs. 108) / Rs. 120 x 100 = 10%; the likely wrong choice is 12%, obtained by measuring the discount against cost price instead of marked price.

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About Profit and Loss

Profit and loss compare the cost price and selling price of an item, using profit or loss percentages based on the cost price unless stated otherwise. Questions include marked price, discount, successive discounts, commission, and finding an unknown price, with care needed to distinguish discount from loss.

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