Problems like these are sometimes hard to translate to equations, so sometimes I like to pick an easy number...so for this, say the cost is $1. If the cost is $1, the shopkeeper's goal is to receive $1.12 after giving a 20% discount on a marked up price...well, $1.12 is 80% of what (1.12 = .8x ...x=what)? $1.40...is how much percent more than $1? I picked 1 because it is easy to see where the percents are coming from.
ok...same concept. the discount is 5% (100-5=95), 1064 is 95% of what? 1120 <- this is the marked up price, 40% above cost...so 1.4x = 1120, x = cost...cost = 800. His profit = received - cost... profit = 1064-8002. Ricky marks his goods at 40% above the cost price but allows a discount of 5% for cash payment to his customers. What actual profit does he make, if he receives $1064 after allowing the discount?