CAT 1996 — QA Question 4
Dishonest MerchantEasy
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
Correct answer: 20%
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 = = 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 = = Re 1 per metre. So his percentage profit in the overall transaction =