Question

A shopkeeper buys an item for Rs 2000 and marks it up by 50% to set the marked price. He then offers a 20% discount on the marked price. What is the profit earned by the shopkeeper?

• A. Rs 600
• B. Rs 500
• C. Rs 400
• D. Rs 700

Hint:

Remember: To calculate profit, find the selling price after applying the discount on the marked price, then subtract the cost price. Double-check percentage calculations.

Answer 1

The Correct Option is C

The objective is to determine the profit realized by the shopkeeper, utilizing the cost price, markup percentage, and discount percentage.

1. Fundamental Definitions:

- Cost Price (CP): The initial purchase cost of the item.
- Marked Price (MP): The price set after applying a markup to the cost price.
- Selling Price (SP): The final price at which the item is sold after a discount is applied.
- Profit: The financial gain, calculated as the difference between the selling price and the cost price.

2. Provided Data:

Cost Price (CP) = Rs 2000
Markup Percentage = 50%
Discount Percentage = 20%

3. Calculation of Marked Price:

Marked Price = CP + (Markup Percentage × CP)
Marked Price = Rs 2000 + (50% × Rs 2000)
Marked Price = Rs 2000 + Rs 1000 = Rs 3000

4. Calculation of Selling Price:

Discount Amount = Discount Percentage × Marked Price
Discount Amount = 20% × Rs 3000 = Rs 600
Selling Price = Marked Price - Discount Amount
Selling Price = Rs 3000 - Rs 600 = Rs 2400

5. Calculation of Profit:

Profit = Selling Price - Cost Price
Profit = Rs 2400 - Rs 2000 = Rs 400

Conclusion:

The total profit achieved by the shopkeeper amounts to Rs 400.