Profit and loss are one of the topics that we come across in day to day life. And there are various terms used while calculating profit and loss. Today our topic will be about the discounts and marked price. We will go in-depth about both the terms and then will help you understand the concept with some examples. There are also practice questions for you at the end.
There are many names used to describe marked prices like retail price, market price, etc. Marked price is the price, which is quoted or appears on the product in the form of a label. It is important to remember that the marked price may or may not be similar to the sales price. Because sales price is the price on which the product is sold whereas the product may not necessarily be sold at the given market price. When the product is sold at marked price than market price is equal to selling price.
Examples of Marked Price
1. The market price of a chair was Rs. 1200. This price was 20% above the cost price. It was sold at a discount of 10% on the marked price. Find the profit percent.
A. 6 % B. 4 % C. 8 % D. 5 %
Here in this question, we are given the market price which is 20% more than the cost price. Also, profit is always calculated on the cost price. Thus, we need to find the cost price first and then compare it to find the profit percentage. As marked price is 20% more than the cost price, CP = 20% of x + x = 1200 => 120x/100 = 1200 => x = (1200 x 100)/120 => x = Rs. 1000. So, the cost price is Rs. 100.
Now, a 10% discount is given on the market price and this will be our selling price. So, selling price = 1200 – 10% of 1200 => 1200 – 120 => Rs. 1080. So, the selling price is Rs. 1080. Thus, profit will be Rs. 1080 – Rs. 1000 = Rs. 80. So, profit percentage = 80/100 x 1000 => 8%. Thus, the correct answer is C.
Discounts are a reduction in the price of the product. Usually, shopkeepers increase the markup price and give their customers discounts to avoid any loss. The price after giving a discount is generally considered as the selling price of the product.
Examples of Discounts
1. A dozen pairs of socks of Rs. 80 are available at a discount of 10%. Find out how many pairs of socks can be bought for Rs. 24.
A. 2 B. 4 C. 6 D. 8
This is one of the simplest types of questions that can be asked on this topic. You just to find the final price after discount and then you will be able to calculate the number of socks.
Here, a 10% discount has been given. So, selling price is 80 – 10% of 80 = 80 – 8 = Rs. 72. So, for Rs. 72 a dozen pairs of socks are available. Thus, at Rs. 24 1/3rd pairs will be available. So, 1/3 of 12 = 4. So, 4 pairs of socks will be available. Thus, the correct answer is B.
1. A merchant decided to mark up his goods by 20% and then offered 10% discount. What will be a percentage of profit or loss?
A. 8% profit B. 8% loss C. 4% loss D. 4% profit
The correct answer is A.
2. A superstore marks its goods by a certain percentage over the past price and then offers a discount of 40%. Using this method, they make 5% profit. Find the percentage by which the goods were marked up.
A. 60 % B. 70 % C. 72 % D. 75 %
The correct answer is D.
3. A trader allows a discount of 10% on the market price of the goods. He still manages to make a profit of 17% on the cost price. What will be profit percentage had the trader sold the goods at the market price?
A. 10 % B. 20 % C. 30 % D. 40 %
The correct answer is C.
4. A merchant sold goods at 10% discount and earned a profit of 20%. What would be the percentage of profit if no discount was offered?
A. 32.32 % B. 33.33 % C. 34. 5 % D. 35. 6 %
The correct answer is B.