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Question
A dealer marks his goods 25% above the cost price and then allows 10% discount on it. What is the cost price of an article on which he gains Rs. 575?
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Solution
Let the C.P. be Rs.100.
So, M.P. = C.P. + 25% of C.P.
= `100 + (25/100 xx 100)`
= Rs.125
Discount
= 10% on M.P.
= `(10)/(100) xx 125`
= Rs.125
So, S.P. of the goods
= M.P. - Discount
= Rs.125 - Rs.12.5
= Rs.112.5
Profit
= S.P. - C.P.
= Rs.112.5 - Rs.100
= Rs.12.5
When the S.P. is Rs.112.5, the profit is Rs.12.5
So, when the gain is Rs.960,
the S.P.
= `(112.5 xx 575)/(12.5)`
= Rs.5175
C.P. = S.P. - Profit
= Rs.5175 - Rs.575
= Rs.4600
Hence, the cost price of and article on which he gains Rs.575 is Rs.4600.
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