A bookseller purchases 5 novels at the marked price of 4 novels from a distributor. If he then sells these novels to customers, offering a discount of 5% on the marked price, what is his profit percentage?
- (a)15%
- (b)18.75%
- (c)20.26%
- (d)25%
Answer
Why
Correct — B. Take the marked price of one novel as ₹100.
Cost of 5 novels = marked price of 4: 4 × 100 = ₹400
Cost per novel: 400 ÷ 5 = ₹80
Selling price after 5% off: 100 − 5 = ₹95
Profit per novel: 95 − 80 = ₹15
Profit %: 15⁄80 × 100 = 18.75% → option (b).
Why the others are wrong
- (a)15% — 15% is the profit on the marked price, ₹15 out of ₹100. Profit percentage is measured on the cost, ₹80, and 15⁄80 = 18.75%.
- (c)20.26% — The exact profit is 15⁄80 = 18.75%. 20.26% would need about ₹16.21 of profit on the ₹80 cost, and a 5% discount does not leave that much.
- (d)25% — 25% ignores the 5% discount. Selling at the full ₹100 on an ₹80 cost gives 20⁄80 = 25%, but the novels sell at ₹95, which cuts the profit to ₹15.
Concept
Two separate deals sit in this question. Buying 5 for the price of 4 lowers the cost: each novel costs 4⁄5 of its marked price.
Selling at 5% off lowers the selling price to 95% of the marked price.
Put both on one base, the marked price: selling price ÷ cost = 95⁄80 = 1.1875, an 18.75% profit. Unless a question says otherwise, profit percentage is taken on the cost price.
The marked price never needs its real value. Any figure works, and ₹100 keeps the 5% discount in whole rupees.
Key facts
- Buying n items for the price of m makes the cost per item m⁄n of the marked price.
- Profit % = (SP − CP) ⁄ CP × 100, measured on the cost price.
- SP ⁄ CP = 0.95 ⁄ 0.80 = 1.1875, which is an 18.75% profit.
Study next
Common traps
- Dividing the ₹15 profit by the ₹100 marked price and marking 15%.
- Forgetting the 5% discount and marking 25%.
23 Sep 2024, 12:30, Quant Q.22 chains two such equalities (marked price of 55 items = cost of 99, selling price of 56 = marked price of 35), keyed 12.5% profit because 99⁄55 × 35⁄56 = 9⁄8.
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