A merchant marks his products 30% above the cost price and provides a 10% discount on the marked price. What percent profit does he earn?
- AOption (a)
12%
- BOption (b)
13%
- COption (c)
17%
- DOption (d)
15%
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Correct answer
17%
Why this answer is correct
Shortcut Trick
Use the successive percentage formula: Net Profit % = x + y + (xy ÷ 100)
Here, markup (x) = +30 and discount (y) = −10.
Net Profit % = 30 − 10 + [30 × (−10)] ÷ 100
Net Profit % = 20 − 3 = 17%
∴ The correct answer is 17%.
Alternate Method
Let the Cost Price (CP) of the product be 100 units.
Given: Markup % = 30%, Discount % = 10%.
⇒ Marked Price (MP) = CP + 30% of CP
⇒ MP = 100 + (30 ÷ 100 × 100) = 130 units.
⇒ Discount = 10% of MP = 10 ÷ 100 × 130 = 13 units.
⇒ Selling Price (SP) = MP − Discount
⇒ SP = 130 − 13 = 117 units.
⇒ Profit = SP − CP = 117 − 100 = 17 units.
⇒ Profit % = (Profit ÷ CP) × 100 = (17 ÷ 100) × 100 = 17%.
∴ The correct answer is 17%.
Additional Information
Relationship between MP and CP
The ratio of Marked Price to Cost Price is given by: MP ÷ CP = (100 + Profit%) ÷ (100 − Discount%).
Successive Discounts
If two successive discounts of d1% and d2% are given, the equivalent single discount is (d1 + d2 − d1d2 ÷ 100)%.
Selling Price Formula
Selling Price can be calculated directly from the Marked Price as SP = MP × (100 − Discount%) ÷ 100.