Having initially established the marked price of a particular commodity at a 20% premium over its cost price, a retail vendor subsequently extended an unspecified discount. If, following this concession, the transaction ultimately yielded a profit of 8% on the cost price, what was the exact percentage of the discount given?
- (a)80%
- (b)50%
- (c)60%
- (d)10%
Answer
Why
Correct — D.
Take the cost price as ₹100.
Marked price, 20% above cost: 100 × 1.2 = ₹120
Selling price, 8% profit on cost: 100 × 1.08 = ₹108
Discount in rupees: 120 − 108 = ₹12
Discount %, on the marked price: 12 ÷ 120 × 100 = 10%
So the discount given was 10% → option (d)
Why the others are wrong
- (a)80% — An 80% discount leaves ₹24 on a ₹120 marked price, far below the ₹100 cost. That is a 76% loss, not an 8% profit.
- (b)50% — Half of ₹120 is ₹60, so selling at ₹60 against a ₹100 cost is a 40% loss. Any discount above 16⅔% already sells below cost.
- (c)60% — A 60% discount leaves ₹48, under half the ₹100 cost, a 52% loss. With only a 20% markup, no discount this large can end in profit.
Concept
Three prices are linked: cost price (CP), marked price (MP) and selling price (SP). Profit is measured on CP; discount is measured on MP.
Taking CP = 100 turns every percentage into rupees. The discount is the gap MP − SP, divided by MP, not by CP.
As a formula: discount % = (markup − profit) ÷ (100 + markup) × 100 = (20 − 8) ÷ 120 × 100 = 10%.
Key facts
- Discount % is calculated on the marked price
- Profit % is calculated on the cost price
- Discount % = (markup % − profit %) ÷ (100 + markup %) × 100
Study next
Common traps
- Dividing the ₹12 gap by the cost price ₹100 and getting 12% instead of dividing by the marked price ₹120
16 Sep 2025, 09:00, Quant Q.12 is the same item with a 30% markup and a 17% profit, again keyed 10% with 50% and 60% among the distractors.
12 Sep 2025, 16:00, Quant Q.16 runs it forwards: a 25% markup and a 10% discount give a 12.50% profit.
Related PYQs
No directly related past PYQ was found.