PrepRung
Sign inSign up free

CAT 2022 Slot 2 · Quant · Profit, Loss and Discount · medium

A shopkeeper marks the price of an article 40% above its cost price. He then offers two successive discounts of 10% and 5% on the marked price. What…

Single correct option

A shopkeeper marks the price of an article 40% above 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. 18%
  2. B. 19.7%
  3. C. 20%
  4. D. 21.3%
Show answer and solution

Answer: (B) 19.7%

Let cost price = 100. Marked price = 140. After a 10% discount: 140 × 0.9 = 126. After a further 5% discount: 126 × 0.9 5 = 119.7. Since cost was 100, profit = 19.7%. Shortcut: net multiplier = 1.4 × 0.9 × 0.95 = 1.197, so profit = 19.7%. Option (c) 20% is the trap if one forgets the second discount is on the already-discounted price.
Report a mistake

Original question written in the CAT 2022 Slot 2 pattern and checked twice for the correct answer. Not an official question paper. How we write and check questions · Corrections policy · Report a mistake