A shopkeeper increases the selling price of an article by 15%. After increasing the selling price, he noticed that the profit percentage changed from 5% to 15%. The percentage increase in the cost price is.
a) 4%
b) 5%
c) 6%
d) 8%
Sol:
Increase in SP of an article = 15%
Profit percentage change = 5% to 15%
Calculation:
A shopkeeper increases the selling price of an article by 15%
Let the initial SP be 100, then later SP will be 115 (increased by 15%)
⇒ New SP = (100 + 5)/100 × 100 = 105/100 × 100 = 105
Now on initial SP, he got 5% profit,
⇒ 5% profit = 5/100 = 1/20 Initial SP = 1 + 20 = 21 units, Initial CP = 20 units
We have assumed that initial SP as 100,
⇒ 21 units = 100
⇒ 1 unit = 100/21
Initial CP = 20 units = 20 × 100/21 = 20/21 × 100
For later he noticed 15% profit,
⇒ 15% profit = 15/100 = 3/20
Later SP = 3 + 20 = 23, Later CP = 20
Later SP is 115 as we have assumed,
⇒ 23 units = 115
⇒ 1 unit = 115/23 = 5, Later CP = 20 units = 20 × 5 = 100
