Thread: Profit Loss & Discount Problems

I am a 13 year old kid. I have got 2 problems relating to profit, loss & discount which I am not able to solve. Can someone please help me out with the 2 problems? Here are they:

1. How much per cent above the cost price should a shopkeeper mark his goods so that after allowing a discount of 20% on the marked price, he gains 12%?

2. 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?

Thanks,

Ron

Originally Posted by rn5a

1. How much per cent above the cost price should a shopkeeper mark his goods so that after allowing a discount of 20% on the marked price, he gains 12%?

40%

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.

2. 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?

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 = 1064-800

$264

Thanks mate for the explanation but to be honest I couldn't understand the explanation you have given for the 2nd problem though I could understand the 1st problem. Can you please simplify the explanation of the 2nd problem?

Thanks,

Ron

OK...I did the 2nd problem in this way (here Selling Price=SP, Cost Price=CP, Marked Price=MP & Discount %=D%):

SP=1064
D%=5%

MP=(SPx100)/(100-D%)
MP=(1064x100)/(100-5)
MP=1120

Let CP be 100
Thus MP=140

When MP=140, then CP=100
When MP=1120, then CP=1120x100/140=800

Profit=SP-CP
Profit=1064-800=264

What I have done above....is it correct?

& this is how I did the 1st problem:

Let CP be 100
P%=12%
So SP=100+12=112

D%=20%

MP=(SPx100)/(100-D%)
MP=(112x100)/(100-20)
MP=140

Therefore % above CP=(140-100)/100x100=40%

Is it correct?

Originally Posted by rn5a

OK...I did the 2nd problem in this way (here Selling Price=SP, Cost Price=CP, Marked Price=MP & Discount %=D%):

SP=1064
D%=5%

MP=(SPx100)/(100-D%)
MP=(1064x100)/(100-5)
MP=1120

Let CP be 100
Thus MP=140

When MP=140, then CP=100
When MP=1120, then CP=1120x100/140=800

Profit=SP-CP
Profit=1064-800=264

What I have done above....is it correct?

& this is how I did the 1st problem:

Let CP be 100
P%=12%
So SP=100+12=112

D%=20%

MP=(SPx100)/(100-D%)
MP=(112x100)/(100-20)
MP=140

Therefore % above CP=(140-100)/100x100=40%

Is it correct?

Both look good to me, bud