In a shop, the profit on articles is 320 percent of the cost price. If the cost price increases by 25 percent but the selling price remains constant, approximately what percentage of the selling price is the profit?
In a shop, the profit on articles is 320 percent of the cost price. If the cost price increases by 25 percent but the selling price remains constant, approximately what percentage of the selling price is the profit?
Explanation
Original cost price = 100
Original selling price = 100 + 320% of 100 = 420
New cost price = 100 + 25% of 100 = 125
Since the selling price remains constant, the profit is:
Profit = Selling price - New cost price = 420 - 125 = 295
Percentage of selling price that is profit:
(295 / 420) * 100% ≈ 70%
So, the correct answer is 70%.