Question

A trader buys goods from Delhi to sell in Bombay, where he gets a price realisation \(20\%\) higher than the Delhi price. In each journey, he spends Rs. 2000 on travelling and Rs. 2500 as a bribe to the parcel authority, and still makes a net profit of Rs. 20,000. Find the total value of goods purchased by the dealer in 7 journeys to Delhi.

• A. Rs. 1,22,500
• B. Rs. 2,45,000
• C. Rs. 8,57,500
• D. None

Hint:

Write the trader's profit for one journey (20% markup minus Rs. 4500 in expenses equals Rs. 20,000), solve for the goods value in one journey, then multiply by 7.

Answer 1

The Correct Option is C

Here is another way to reach the same result, working with totals for all 7 journeys directly instead of first solving for one journey.

Let the total value of goods bought over all 7 journeys be Rs. \(T\). Since the same 20% markup applies to every journey, the total selling price in Bombay across all 7 trips is \(1.2T\).

Total expenses over 7 journeys: travel cost is \(7 \times 2000 = Rs. 14,000\), and the bribe cost is \(7 \times 2500 = Rs. 17,500\). Together, that is Rs. 31,500.

Total net profit over 7 journeys, since Rs. 20,000 is earned on each of the 7 trips, is \(7 \times 20,000 = Rs. 1,40,000\).

Now write the profit equation for the whole set of 7 journeys:

\[ (\text{Selling price}) - (\text{Cost price}) - (\text{Expenses}) = \text{Profit} \] \[ 1.2T - T - 31,500 = 1,40,000 \] \[ 0.2T = 1,71,500 \] \[ T = \frac{1,71,500}{0.2} = 8,57,500 \]

Both routes agree: whether we scale up a single journey's cost by 7, or build the profit equation for all 7 journeys together, the total value of goods purchased works out to Rs. 8,57,500. Option (1) only gives the value for one journey, and option (2) is simply double that, so neither matches what the question actually asks for, the value over 7 journeys.

\[ \boxed{Rs.\ 8,57,500} \]