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 selling at ₹126 on the ₹100 cost. From the ₹180 marked price that is a 30% discount, not the 10% stated.
- (b)56% — A 56% profit needs a festive price of ₹156, a discount of ₹24 on ₹180, about 13.3%. A 10% discount removes only ₹18, leaving ₹162.
- (d)60% — Adding the percentages, 20 + 50 − 10, gives 60%, but each change acts on the previous price, so they multiply: 1.2 × 1.5 × 0.9 = 1.62.
Concept
Each price here is built on the one before: 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, a 62% profit.
Profit is measured on cost, not on P. Taking cost as ₹100 turns the final price straight into the profit percentage.
The marked price is set as a multiple of P, the old selling price, not of cost. That is why P has to be traced back to cost before the profit can be measured: 1.35P is 35% above P but 62% above cost.
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.
- When P carries a 20% profit, cost price = P ÷ 1.2.
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 identical question, with the same four options and the same key, was asked at 12 Sep 2025, 16:00, Quant Q.15.
15 Sep 2025, 12:30, Quant Q.9 builds it on a 5% loss instead: 0.9 × 1.2A on a cost of A ÷ 0.95 is a 2.6% profit.
Related PYQs
No directly related past PYQ was found.