Question : A shopkeeper increases the selling price of an article by 15%. After increasing the selling price, he noticed that the profit percentage changed from 5% to 15%. The percentage increase in the cost price is:
Option 1: 20%
Option 2: 10%
Option 3: 15%
Option 4: 5%
Correct Answer: 5%
Solution :
Let the original cost price be 100.
His profit is 5%.
So, the original selling price = 100 + 5 = 105
He increases the selling price of an article by 15%.
So, new selling price = $\frac{100+15}{100}×105=\frac{483}{4}$
His new profit is 15%.
So, new cost price = $\frac{100}{100+15}×\frac{483}{4}=105$
$\therefore$ Increase in cost price = $\frac{105-100}{100}×100=5\%$
Hence, the correct answer is 5%.
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