Question
The profit earned on selling an item is 25%. If the cost
price of the item was 20% less, and the selling price of the item was Rs. 30 more, then the profit earned would be 60%. Find the absolute reduction in the cost price of the item.Solution
ATQ,
Let the initial cost price of the item be Rs. 100x
So, selling price of the item = 100x × 1.25 = Rs. 125x
So, new cost price of the item = 100x × 0.8 = Rs. 80x
And new selling price of the item = Rs. (125x + 30)
ATQ:
80x × 1.60 = 125x + 30
Or, 128x = 125x + 30
Or, 3x = 30
So, x = 30 / 3 = 10
Required reduction = 100x – 80x = 20x = 20 × 10 = Rs. 200
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