A person buys a mobile phone from a shop for ₹7,800. The shopkeeper earns a…
2023
A person buys a mobile phone from a shop for ₹7,800. The shopkeeper earns a profit of 20% on the cost price. What is the shopkeeper’s cost price of the mobile phone?
Answer: A. ₹ 6500 — CONCEPT When profit is calculated on cost price, selling price equals cost price plus the stated percentage of cost price. Thus, Selling Price = Cost Price ×…
- A.
₹ 6500
- B.
₹ 6240
- C.
₹ 5860
- D.
₹ 6800
Show answer & explanation
Correct answer: A
CONCEPT
When profit is calculated on cost price, selling price equals cost price plus the stated percentage of cost price.
Thus, Selling Price = Cost Price × (1 + Profit Rate). To reverse the calculation, divide the selling price by this multiplier.
APPLICATION
Let the shopkeeper’s cost price be C. The selling price is ₹7,800 and the profit rate is 20% = 0.20.
Use Selling Price = Cost Price × (1 + Profit Rate): 7,800 = C × (1 + 0.20).
Simplify the multiplier: 7,800 = 1.20C.
Divide both sides by 1.20: C = 7,800 ÷ 1.20 = ₹6,500.
CROSS-CHECK
A 20% profit on ₹6,500 is ₹1,300, and ₹6,500 + ₹1,300 = ₹7,800. Therefore, the cost price is ₹6,500.