A merchant purchases a cloth at a rate of Rs.100 per meter and receives 5 cm length of cloth free for every 100 cm length of cloth purchased by him. He sells the same cloth at a rate of Rs.110 per meter but cheats his customers by giving 95 cm length of cloth for every 100 cm length of cloth purchased by the customers. If the merchant provides a 5% discount, the resulting profit earned by him is
Explanation:
The merchange earns profit due to increase in price and due to cheating (quantity) while buying and selling.
multiplication factor for price: 110/100 × 0.95
multiplication factor for quantity: while buying = 105/100 while selling = 100/95 overall multiplication factor for quantity: 105/100 × 100/95 = 105/95
⇒ overall multiplication factor (including price and quantity) = 110/100 × 0.95 × 105/95 = 11/10 × 105/100 = 1.155
∴ overal % profit = (1.155 - 1) × 100% = 15.5%
Hence, option (c).
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