A person buys a brand new Honda bicycle for Rs.800/-. He uses it for a year…
2024
A person buys a brand new Honda bicycle for Rs.800/-. He uses it for a year and then sells it. He makes a profit of 10% in this transaction. Then again he buys a new cycle but finds that the price has gone up by 20 %. He uses it for a year and then sells it for a profit of 30%. Find the average annual profit of that the person.
- A.
160
- B.
184
- C.
168
- D.
172
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Correct answer: B
Solution:
First transaction: cost price = Rs. 800. Selling price after 10% profit = 800 × 1.10 = Rs. 880, so first-year profit = Rs. 80.
Second purchase: price increased by 20%, so new cost price = 800 × 1.20 = Rs. 960.
Second transaction: selling at 30% profit gives selling price = 960 × 1.30 = Rs. 1248, so second-year profit = Rs. 288.
Total profit over two years = 80 + 288 = Rs. 368.
Average annual profit = 368 ÷ 2 = Rs. 184.