The cost price of an article is Rs. 2800. Profit as a percentage of selling price is 20 percent. What is the actual profit (in Rs.) ?
- AOption (a)
Rs. 616
- BOption (b)
Rs. 504
- COption (c)
Rs. 700
- DOption (d)
Rs. 560
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Correct answer
Rs. 700
Why this answer is correct
The correct answer is Rs. 700
Key Points
- According to the question, the Cost Price (CP) of the article is Rs. 2800.
- The Profit percentage is given as 20% of the Selling Price (SP). This is different from the usual calculation where profit is a percentage of the Cost Price.
- Let the Selling Price be SP. We know that Profit = SP − CP.
- As per the condition: Profit = 20% of SP = (20/100) × SP = 0.2 × SP.
- Substitute the value of Profit in the basic formula: 0.2 × SP = SP − 2800.
- Rearrange the equation: SP − 0.2 × SP = 2800.
- This simplifies to: 0.8 × SP = 2800.
- Calculate SP: SP = 2800 ÷ 0.8 = Rs. 3500.
- Now, the Actual Profit = SP − CP = 3500 − 2800 = Rs. 700.
- Alternative Method: Let SP be 100 units. Then Profit = 20 units. CP = SP − Profit = 100 − 20 = 80 units. If 80 units = 2800, then 1 unit = 2800 ÷ 80 = 35. Therefore, Profit (20 units) = 20 × 35 = Rs. 700.
Additional Information
- Profit Margin: When profit is calculated as a percentage of the Selling Price, it is often referred to as the Profit Margin.
- Markup: When profit is calculated as a percentage of the Cost Price, it is known as Markup.
- In most standard arithmetic problems, if it is simply mentioned as Profit Percentage, it is assumed to be calculated on the Cost Price unless specified otherwise.
- Formula for Profit Percentage on CP: (Profit ÷ CP) × 100.
- Formula for Profit Percentage on SP: (Profit ÷ SP) × 100.








