Question:
A shopkeeper allows 20% off on the marked price of goods and still gets a profit of 25%. What is the actual cost to him of an article marked Rs 500?
Solution:
Given:
MP of an article $=$ Rs. 500
Discount $=20 \%$
There fore, Discount $=20 \%$ of 500
$=0.20 \times 500$
$=100$
So, SP $=\mathrm{MP}-$ Discount
$=$ Rs. $(500-100)$
$=$ Rs. 400
$\mathrm{CP}=\left[\frac{100}{(100+\text { Gain } \%)} \times \mathrm{SP}\right]$
$=\left[\frac{100}{(100+25)} \times 400\right]$
$=\frac{40000}{125}$
$=$ Rs. 320
Thus, the actual cost of the article is Rs. 320 .