A shopkeeper fixes the selling price of an article 20% above its cost. If the cost price increases by 20% and he increases the selling price by 16%, then his profit percentage (on the increased cost) is:
- A16%
- B20%
- C15%
- D24%
Solution & Step-by-step Explanation
Let the initial Cost Price (CP
1
) = 100.
The selling price is fixed 20% above cost:
Initial Selling Price (SP
1
)=120
Now, cost price increases by 20%:
New Cost Price (CP
2
)=100×1.20=120
Selling price increases by 16%:
New Selling Price (SP
2
)=120×1.16=139.2
Profit on the increased cost:
Profit=SP
2
−CP
2
=139.2−120=19.2
Profit Percentage=
120
19.2
×100=
12
192
=16%
1
) = 100.
The selling price is fixed 20% above cost:
Initial Selling Price (SP
1
)=120
Now, cost price increases by 20%:
New Cost Price (CP
2
)=100×1.20=120
Selling price increases by 16%:
New Selling Price (SP
2
)=120×1.16=139.2
Profit on the increased cost:
Profit=SP
2
−CP
2
=139.2−120=19.2
Profit Percentage=
120
19.2
×100=
12
192
=16%