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CAT 1996 — QA Question 4

Dishonest MerchantEasy
Passage / Data

Direction: Answer the questions based on the following information.

In a locality, there are five small cities: A, B, C, D and E. The distances of these cities from each other are as follows.

AB = 2 km  AC = 2km  AD > 2 km  AE > 3 km BC = 2 km
BD = 4 km  BE = 3 km CD = 2 km CE = 3 km  DE > 3 km

Instead of a metre scale, a cloth merchant uses a 120 cm scale while buying, but uses an 80 cm scale while selling the same cloth. If he offers a discount of 20% on cash payment, what is his overall profit percentage?

Answer & solution

  • 20%

  • B

    25%

  • C

    40%

  • D

    15%

Solution

Let the price per metre of cloth be Re 1. The shopkeeper buys 120 cm, but pays for only 100 cm. In other words, he buys 120 cm for Rs. 100. So his CP = (100120) = Re 0.833 per metre. Now he sells 80 cm, but charges for 100 cm. In other words, he sells 80 cm for Rs. 100. On this he offers a 20% discount on cash payment. So he charges Rs. 80 for 80 cm cloth. In other words, his SP = (8080) = Re 1 per metre. So his percentage profit in the overall transaction = (1-0.833)0.833=20%.

CAT 1996 QA Q4: Instead of a metre scale, a cloth merchant uses a 120 cm scale while buying, but uses an 80 cm scale while sel — Solution | TheCATExam