A shopkeeper sells an item at a discount of 40% on the item's listed price of…
2020
A shopkeeper sells an item at a discount of 40% on the item's listed price of Rs. 1500.00. He still makes a profit of 20% on the original cost of the item. What is the original cost of the item?
- A.
Rs. 500
- B.
Rs. 750
- C.
Rs. 600
- D.
Rs. 1080
Attempted by 27 students.
Show answer & explanation
Correct answer: B
To find the original cost of the item, we can break the problem down into two logical steps: determining the selling price and then calculating the cost price based on the profit margin.
Step-by-Step Calculation
Calculate the Selling Price (SP):
Listed Price = Rs. 1,500
Discount = 40% of Rs. 1,500 = 0.40 × 1500 = Rs. 600
Selling Price = Listed Price - Discount = 1500 - 600 = Rs. 900
Calculate the Cost Price (CP):
The shopkeeper makes a 20% profit on the original cost (C).
Profit formula: SP = CP + Profit = CP + 0.20 × CP = 1.20 × CP
Equation: 900 = 1.20 × C
C = 900 / 1.20 = Rs. 750