Question:
Jasmine allows 4% discount on the marked price of her goods and still earns a profit of 20%. What is the cost price of a shirt for her marked at Rs 850?
Solution:
Given,
MP of the shirt $=$ Rs. 850
Discount $=4 \%$
Discount allowed $=$ Rs. $\left(\frac{4}{100} \times 850\right)$
$=$ Rs. 34
Thus, SP of the shirt $=$ Rs. $(850-34)=$ Rs. 816
Now,
Profi $t$ earned by Jasmine $=20 \%$
Thus, CP $=\frac{100 \times \text { SP }}{(100+\text { Profit } \%)}$
$=$ Rs. $\left(\frac{100 \times 816}{100+20}\right)$
$=$ Rs. $\left(\frac{100 \times 816}{120}\right)$
$=$ Rs. 680
Thus, the cost price of the shirt is Rs. 680 .