A shopkeeper fixes the marked price of an item 25% above its cost price. What percentage of discount may be allowed to gain 6%?
The shopkeeper fixes the Marked Price (MP) 25% above the cost price.
MP = CP + 25% of CP = 100 + (25/100) * 100 = 100 + 25 = ₹ 125.
The desired gain is 6%. The Selling Price (SP) must be CP plus the gain.
SP = CP + 6% of CP = 100 + (6/100) * 100 = 100 + 6 = ₹ 106.
The discount is the difference between the Marked Price and the Selling Price.
Discount = MP – SP = 125 – 106 = ₹ 19.
The discount percentage is calculated on the Marked Price.
Discount Percentage = (Discount / MP) * 100% = (19 / 125) * 100%.
(19 / 125) * 100 = (19 * 4 / 125 * 4) * 100 = (76 / 500) * 100 = 76 / 5 = 15.2%.