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Select the correct answerIn a shop, the profit is 320% of the cost. If the cost increases by 25% but the selling price remains constant, find out approximately what percentage of the selling price is the profit?Options100%250%70%30%

Question

Select the correct answerIn a shop, the profit is 320% of the cost. If the cost increases by 25% but the selling price remains constant, find out approximately what percentage of the selling price is the profit?Options100%250%70%30%

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Solution

Sure, let's solve this step by step:

  1. Let's assume the cost price (C) of the item is 100.Therefore,theprofit(P)is320100. Therefore, the profit (P) is 320% of the cost, which is 320. This makes the selling price (S) 420(420 (100 cost + $320 profit).

  2. If the cost increases by 25%, the new cost price (C') is $125.

  3. However, the selling price remains constant at 420.Therefore,thenewprofit(P)isthesellingpriceminusthenewcostprice,whichis420. Therefore, the new profit (P') is the selling price minus the new cost price, which is 420 - 125=125 = 295.

  4. To find out what percentage of the selling price is the new profit, we divide the new profit by the selling price and multiply by 100. So, P'/S * 100 = 295/295/420 * 100 ≈ 70.24%.

So, the correct answer is approximately 70%.

This problem has been solved

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