A retailer marks all his goods at 50 percent above the cost price and, thinking that he will still make a 25 percent profit, offers a discount of 25 percent on the marked price. What is the actual profit he earns on his sales?
A25%
B12%
C12.50% ✓ Correct
D15%
Correct answer: (C) 12.50%
Explanation
The actual profit is 12.5%.
The marked price is 50% above cost, so MP = 1.5 x CP.
A 25% discount gives SP = MP x 0.75 = 1.5 x 0.75 x CP.
SP = 1.125 x CP.
The profit is 12.5% of the cost price.
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