A trader marks an item 40% above its cost price and gives a discount of 10%. Find his profit percentage.
- AOption (a)
24%
- BOption (b)
26%
- COption (c)
30%
- DOption (d)
20%
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Correct answer
26%
Why this answer is correct
Shortcut Trick
Net Profit% = Markup% + Discount% + (Markup × Discount) ÷ 100
Here, Markup = +40% and Discount = −10%.
Net Profit% = 40 − 10 + (40 × −10) ÷ 100
Net Profit% = 30 − 4 = 26%.
∴ The correct answer is 26%.
Alternate Method
Given: Markup Percentage = 40%, Discount Percentage = 10%.
Formulas: MP = CP × (100 + Markup%) ÷ 100 | SP = MP × (100 − Discount%) ÷ 100 | Profit% = (SP − CP) ÷ CP × 100.
⇒ Let Cost Price (CP) be 100.
⇒ Marked Price (MP) = 100 + 40% of 100 = 140.
⇒ Selling Price (SP) = 140 − 10% of 140 = 140 − 14 = 126.
⇒ Profit = SP − CP = 126 − 100 = 26.
⇒ Profit Percentage = (26 ÷ 100) × 100 = 26%.
∴ The correct answer is 26%.
Additional Information
Marked Price & Discount
The Marked Price (MP) is the price listed on the label, and Discount is always calculated on the MP to arrive at the Selling Price (SP).
Successive Percentage Change
Profit can be seen as a successive change of markup (increase) and discount (decrease): a + b + (ab ÷ 100).