Question : A shopkeeper gives 20% commission on the retail price of one article and earns 5% profit. If his commission is reduced by 10%, then what is his approximate profit percentage? (Nearest integral value)
Option 1: 18%
Option 2: 10%
Option 3: 15%
Option 4: 8%
Correct Answer: 18%
Solution :
Let the cost price of the article for the shopkeeper is Rs. 100.
If the shopkeeper earns a profit of 5%, then the selling price of the article is Rs. 105.
If the shopkeeper gives a commission of 20% on the retail price, then the retail price of the article
= $\frac{105}{80}$ × 100 = Rs. 131.25
If the commission is reduced by 10%, then the new commission is 10% of the retail price, which is Rs. 13.125.
So, the new selling price for the shopkeeper = 131.25 – 13.125 = Rs. 118.125
Therefore, the new profit percentage = $\frac{118.125 - 100}{100}$ × 100 = 18.125% ~ 18%
Hence, the correct answer is 18%.
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