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Question
If a trader increased the selling price of an article by 10%, then his profit increased by 12%. What % profit did the trader make at the original selling price?
1. 12%
2. 22%
3. 2%
4. 20%
5. 32%

Choice (4)

Let the original selling price be s. And let the original cost price be Rs.100

Then when he increased his selling price by 10%, i.e., by 10% of s or 0.1 s, his profit increased by 12% of cost price = 12% of 100 = Rs.12

i.e., 0.1 s = 12 or s = 120.
We have assumed his cost to be Rs.100 and have got 's' to be Rs.120.

So, his profit = 120 - 100 = 20, when the cost is Rs.100

Or his profit margin = (profit / cost price)*100 = (20/100)*100 = 20%