Question

If a seller gives a discount of 15% on retail price, she still makes a profit of 2%. Which of the following ensures that she makes a profit of 20%?

• A. Give a discount of 5% on retail price
• B. Give a discount of 2% on retail price
• C. Increase the retail price by 2%
• D. Sell at retail price

Answer 1

Answer: (D)

Sell at retail price

Answer 2

Let the retail price be 100.
Discount = 15
and Selling price = 85
So, Cost price =$\frac{85}{1.02}=\frac{500}{6}$
To achieve a profit of 20%, the selling price needs to be $=\frac{500}{6}(1.2)=100$
To achieve a profit of 20%, the seller needs to sell at the retail price.