A high-end watch is initially marked up by 50% above its cost price. During a sale, it is offered at a discount of 20% on its marked price. However, a special customer receives an additional discount of y% on the discounted price, bringing the final selling price to ₹4320. If the shopkeeper still makes a profit of 8% on the cost price after all discounts, what was the original cost price of the watch and the value of y?
- (a)CP = ₹4000, y = 10%
- (b)CP = ₹4500, y = 5%
- (c)CP = ₹4800, y = 12.5%
- (d)CP = ₹5000, y = 8%
Answer
Why
Correct — A.
Let the cost price be C.
Mark-up 50%: marked price = 1.5C
20% discount: 1.5C × 0.8 = 1.2C
8% profit after all discounts: final price = 1.08C
1.08C = 4320, so C = 4320 ÷ 1.08 = ₹4000
Price before the extra discount: 1.2 × 4000 = ₹4800
Extra discount: 4800 × (1 − y⁄100) = 4320
1 − y⁄100 = 4320 ÷ 4800 = 0.9, so y = 10% → option (a)
Why the others are wrong
- (b)CP = ₹4500, y = 5% — CP ₹4500 with an 8% profit means a final price of 1.08 × 4500 = ₹4860, not ₹4320. The profit condition rules it out whatever y is.
- (c)CP = ₹4800, y = 12.5% — ₹4800 is the price after the 20% discount on the ₹6000 marked price, not the cost. An 8% profit on a cost of ₹4800 would need a sale at ₹5184.
- (d)CP = ₹5000, y = 8% — CP ₹5000 with an 8% profit means selling at ₹5400. The final price of ₹4320 is 8% above ₹4000, not above ₹5000.
Concept
Turn each change into a multiplier on the cost price: a 50% mark-up is × 1.5, a 20% discount is × 0.8, and an 8% profit means the final price is 1.08 × cost.
The profit condition gives the cost in one step, 4320 ÷ 1.08 = ₹4000. The unknown discount y is then the step from 1.2 × 4000 = ₹4800 down to ₹4320.
Cross-check: 1.5 × 0.8 × 0.9 = 1.08, exactly the 8% profit the stem states, so the mark-up, both discounts and the profit agree with one another.
Key facts
- A 50% mark-up then a 20% discount leaves 1.5 × 0.8 = 1.2 times cost.
- Successive discounts multiply: 20% then 10% is 0.8 × 0.9 = 0.72, a net 28% off the marked price.
- Cost price = final price ÷ (1 + profit rate): 4320 ÷ 1.08 = ₹4000.
Study next
Common traps
- Taking ₹4800, the price after the first discount, as the cost price.
- Measuring y against the marked price of ₹6000: (6000 − 4320) ÷ 6000 = 28% is the combined discount, not y.
- Finding the cost as 4320 × 0.92 instead of 4320 ÷ 1.08.
15 Sep 2025, 12:30, Quant Q.10 uses the same factors in a different order: a 50% mark-up, then discounts of 10% and 20%, is 1.5 × 0.9 × 0.8 = 1.08 of cost, so an ₹80 profit gives the keyed sale of ₹1080.
18 Sep 2024, 12:30, Quant Q.3 asks for the second discount directly: ₹150 less 12.5% is ₹131.25, and 105 ÷ 131.25 = 0.8 gives the keyed 20%.
Related PYQs
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