Question

A shopkeeper buys a watch for Rs 2,500 and marks up its price. A customer buys the watch for Rs 3,300 which includes a sales tax of 10% on the marked up price. Find the mark-up percentage on the price of the watch. Also, find his profit percentage.

Answer 1

Let marked up price be x

Cost of the watch =Rs (2,500 + x)

Sales tax = 10 % of the marked up price 

=`10/100 xx` Rs (2500 + x)

= Rs `(2500 + x)/10`

Total cost = 

= Rs (2500 + x) + `(2500 + x)/10`

= `(25000 + 10  x + 2500 + x)/10`

= `(27500 + 11  x)/10`

But total cost = 3,300 

⇒ `(27500 + 11 x)/10` = Rs 3300

⇒  27,500 + 11 x =  Rs 33,000 

⇒  11 x = Rs 5,500 

⇒ x = Rs 500

Increase in price = Rs 500

Percentage increase in mark up price

= `500/2500 xx 100 = 20 %`

Hence, percentage increase in mark up price = 20 % 

His profit = (increased price - cost price)

=Rs (3,000 - 2,500) = Rs 500 

His profit percentage = `500/2500 xx 100 = 20 %`

Hence, his profit percentage = 20 %