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CAT 2024 Slot 3 · Quant · Percentages · easy

A retailer marks up the price of an item by 40% over its cost price. He then offers two successive discounts of 10% and 5% on the marked price. What…

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A retailer marks up the price of an item by 40% over its cost price. He then offers two successive discounts of 10% and 5% on the marked price. What is his overall percentage profit?
  1. A. 15%
  2. B. 18%
  3. C. 19.7%
  4. D. 21%
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Answer: (C) 19.7%

Let CP = 100. Marked price = 100 × 1.40 = 140. After a 10% discount: 140 × 0.90 = 126. After a further 5% discount: 126 × 0.95 = 119.7. So SP = 119.7 for CP = 100, giving a profit of 19.7%. Shortcut: net factor = 1.40 × 0.90 × 0.95 = 1.197, i.e., a 19.7% net increase over CP.
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Original question written in the CAT 2024 Slot 3 pattern and checked twice for the correct answer. Not an official question paper. How we write and check questions · Corrections policy · Report a mistake