Question

Jasmine allows 4% discount on the marked price of her goods and still earns a profit of 20%. What is the cost price of a shirt if its marked price is 850?

• A. 650
• B. 720
• C. 700
• D. 680

Hint:

The direct formula \( \text{CP} = \text{MP} \times \frac{100 - \text{Discount \%}}{100 + \text{Profit \%}} \) is very efficient for problems relating Cost Price, Marked Price, Discount, and Profit. Ensure to correctly substitute percentages.

Answer 1

The Correct Option is D

Step 1: Selling price after the 4% discount on the marked price is \( 850 \times 0.96 = 816 \).

Step 2: Assume a cost price of 100 units as a base; with a 20% profit, the corresponding selling price on this base would be 120 units.

Step 3: The real scale factor is \( \frac{816}{120} = 6.8 \), so the actual cost price is \( 100 \times 6.8 = 680 \).
\[ \boxed{Rs.\ 680} \]