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    Question

    A retailer buys a product at a price which is 25% less

    than the marked price. He sells the product at a 20% profit on the cost price. If the marked price of the product is $150, what is the profit or loss percentage based on the marked price?
    A 10% profit Correct Answer Incorrect Answer
    B 10% loss Correct Answer Incorrect Answer
    C 12.5% profit Correct Answer Incorrect Answer
    D 12.5% loss Correct Answer Incorrect Answer

    Solution

    Marked price = $150. Cost price = 75% of the marked price = $150 × 0.75 = $112.50. Selling price = Cost price × 1.20 = $112.50 × 1.20 = $135. Profit = Selling price - Marked price = $135 - $150 = -$15 (a loss). Profit percentage based on marked price = (-15 / 150) × 100 = -10%. The retailer incurs a loss of 10% based on the marked price.

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