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    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.
    A 200 Correct Answer Incorrect Answer
    B 150 Correct Answer Incorrect Answer
    C 190 Correct Answer Incorrect Answer
    D 225 Correct Answer Incorrect Answer

    Solution

    ATQ,

    Let the initial cost price of the item be Rs. 100x

    So, selling price of the item = 100x Ă— 1.25 = Rs. 125x

    So, new cost price of the item = 100x Ă— 0.8 = Rs. 80x

    And new selling price of the item = Rs. (125x + 30)

    ATQ:

    80x Ă— 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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