A mobile phone retailer sells a phone for ₹P and earns a profit of 20%. For a special festive offer, he marks the same phone at ₹1.5P. At the offer, he provides a discount of 10%. What will be the percentage profit that he will make during the festive offer?
- (a)26%
- (b)56%
- (c)62%
- (d)60%
Answer
Why
Correct — C. Take the cost price as ₹100.
Old selling price P = 120% of ₹100 = ₹120
Festive marked price = 1.5P = 1.5 × ₹120 = ₹180
After the 10% discount: 90% of ₹180 = ₹162
Profit = ₹162 − ₹100 = ₹62 on a cost of ₹100 = 62% → option (c)
Why the others are wrong
- (a)26% — A 26% profit means a selling price of ₹126 on the ₹100 cost. The festive price is 90% of ₹180 = ₹162, well above that.
- (b)56% — A 56% profit needs a festive price of ₹156. A 10% discount on the ₹180 marked price removes only ₹18, leaving ₹162.
- (d)60% — Adding the percentages, 20 + 50 − 10, gives 60%, but successive changes multiply: 1.2 × 1.5 × 0.9 = 1.62, a 62% profit.
Concept
Each price in this stem is set from the one before it: cost → P (×1.2) → marked price (×1.5) → festive price (×0.9).
Chained percentage changes multiply, so the overall factor is 1.2 × 1.5 × 0.9 = 1.62.
Profit is measured on cost, not on P. Taking cost as ₹100 makes the final figure the profit percentage directly.
The marked price is fixed as a multiple of P, the old selling price, not of the cost. That is why P has to be traced back to cost before the profit can be measured.
Key facts
- Successive percentage changes multiply: ×1.2, ×1.5 and ×0.9 combine to ×1.62.
- A 10% discount on 1.5P leaves 0.9 × 1.5P = 1.35P.
- Profit % is always on cost price: here ₹62 on ₹100.
Study next
Common traps
- Measuring the gain against P: 1.35P is 35% above P, but P is itself 20% above cost.
- Adding the percentages (20 + 50 − 10 = 60%) instead of multiplying the factors.
The same construction appears at 15 Sep 2025, 12:30, Quant Q.9: a shirt sold at ₹A for a 5% loss is marked at 1.2A and sold at 10% off, so the final price 1.08A on a cost of A ÷ 0.95 is a 2.6% profit.
Related PYQs
No directly related past PYQ was found.