Question : A merchant marks an article 20% above the cost price. He then sells it at a discount of 20%. The sale gives him:
Option 1: No loss no gain
Option 2: 4% loss
Option 3: 2% gain
Option 4: 4% gain
Correct Answer: 4% loss
Solution :
Given:
A merchant marks an article 20% above the cost price. He then sells it at a discount of 20%.
Let the cost price be 100 units.
Now marked price = 120 units
So, Selling price = $\frac{120}{100}×80=96$
Loss = 100 – 96 = 4
Loss percentage = $\frac{4}{100}×100=4$%
So, the loss percentage is 4%.
Hence, the correct answer is 4% loss.
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