Profit and Loss

[Pdgmat2010]

By selling an article at 80% of its marked price, a merchant makes a loss of 12%. what will be the % profit made by the merchant if he sells the article at 95% of its marked price?

A. 5% profit
B. 1% loss
C.10% profit
D. 5.5% profit
E. 4.5% profit

OA after some discussion ( plz bear with me)

cheers,
pd

[4GMAT_Mumbai]

Hi,

0.8 times MP = 0.88 CP (as he makes a 12 % loss)

So, CP = 0.8 * MP / 0.88

CP = 80 * MP / 88 = 10 * MP / 11

So, MP = CP * 11 / 10

0.95 MP = 0.95 times (11 times CP / 10)

= 95 * 11 * CP / 1000

= 1045 CP / 1000

Current SP = 1.045 CP

Hence, P% = 4.5%.

Hope this helps.

[Rahul@gurome]

By selling an article at 80% of its marked price, a merchant makes a loss of 12%. what will be the % profit made by the merchant if he sells the article at 95% of its marked price?

A. 5% profit
B. 1% loss
C.10% profit
D. 5.5% profit
E. 4.5% profit

cheers,
pd

Let the selling price (S.P) be X and cost price (C.P) be Y.
Selling price = 80% of its marked price = 0.8 of X = 0.8X
Loss% = [(C.P - S.P)/C.P]*100
12 = [(Y - 0.8X)/Y]*100 or 12Y = 100Y - 80X or 80X = 88Y or X = 1.1Y

New S.P = 95% of X = 0.95X
Profit% = [(S.P - C.P)/C.P]*100 = [(0.95X - Y)/Y]*100 = [(0.95*1.1Y - Y)/Y]*100 = 0.045*100 = 4.5
So, Profit% = 4.5%

The correct answer is (E).