in a certain store, the profit is 320% of the cost. if the cost increases by 25% but the selling price remains constant, approximately what percentage of the selling price is the profit?
The profit will be about 70% of the selling price.
Step-by-step solution
Let the original cost price be 100100100.
-
Profit is 320% of cost
→ Profit =320=320=320 (since 320% of 100 is 320) -
So original selling price
SP=Cost+Profit=100+320=420\text{SP}=\text{Cost}+\text{Profit}=100+320=420SP=Cost+Profit=100+320=420.
Now the cost increases by 25%, but selling price stays the same:
-
New cost price
=125% of 100=125=125%\text{ of }100=125=125% of 100=125. -
New profit
=SP−new cost=420−125=295=\text{SP}-\text{new cost}=420-125=295=SP−new cost=420−125=295.
We need: profit as a percentage of selling price :
Required %=295420×100\text{Required %}=\frac{295}{420}\times 100Required %=420295×100
≈70%\approx 70%≈70%
So the profit is approximately 70% of the selling price (option B).
