A bought a tape recorder for Rs 8,000

Question:

A bought a tape recorder for Rs 8,000 and sold it to B. B in turn sold it to C, each earning a profit of 20%. Which of the following is true:

(a) A and B earn the same profit.

(b) A earns more profit than B.

(c) A earns less profit than B.

(d) Cannot be decided.

Solution:

(c) A earns less profit than B

Explanation: Cost price of tape recorder bought by A = Rs.8000

Cost price of tape recorder for B =20% profit on cost price for A

=20/100 x 8000 + 8000

=20 x 80 + 8000

=1600 + 8000

=Rs.9600

Cost price of tape recorder sold to C = 20% profit on cost price for B

= 20/100 x 9600 + 9600

=1929 + 9600

= Rs.11520

Here, profit for A= Rs.1600 Profit for B = Rs.1920

So, A earns less profit than B.

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