A shopkeeper labelled the price of his articles so as to earn a profit of 40% on the cost price. He then sold the articles by offering a discount of 20% on the labelled price. What is the actual percent profit earned in the deal?
Solution
Correct Answer: Option B
Let the cost price of the articles be Rs. 100.
So, the labelled price for earning 40% profit = 100 + (40% of 100) = Rs. 140
He sold the articles by offering a discount of 20% on the labelled price.
Then, the selling price = 140 – (20% of 140) = Rs. 140 × (80/100) = Rs. 112
∴ The actual profit in the deal \(= \frac{{112\;-\;100}}{{100}} \times 100 = 12\%\)
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