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1. A shopkeeper marks the price of an item keeping 20% profit. If he offers a discount of $12 \frac{1}{2} %$ on the marked price, his gain percent will be = ?

A. 4.5%

B. 5%

C. 7.5%

D. 8%

Solution:

Let cost price of item = Rs. 100
Marked price of item = 120% of 100

\begin{aligned} = \frac{120}{100} \times 100 \\ =  Rs . 120 \end{aligned}

After discount, selling price = 87.5% of 120

\begin{aligned} \frac{87.5}{100} \times 120  =  Rs . 105 \\ Profit % = \frac{105 - 100}{100} \\ = 5 % \end{aligned}

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