Question : A dealer marks his goods 20% above their cost prices. Then he allows such a discount on the marked price that he makes a profit of 8%. The rate of discount is:
Option 1: 12%
Option 2: 10%
Option 3: 6%
Option 4: 4%
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Correct Answer: 10%
Solution :
Given: A dealer marks his goods 20% above their cost price (CP). Then he allows such a discount on the marked price (MP) that he makes a profit of 8%.
Let the CP = Rs. 100
Then, the MP = (100 + 20) = Rs. 120
Now profit = 8%
So, selling price (SP) = (100 + 8) = Rs. 108
Discount percentage = $\frac{\text{Marked Price – Selling Price}}{\text{Marked Price}}×100$% = $(\frac{120-108}{120})×100$ = 10%
Hence, the correct answer is 10%.
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