A manufacturer sells goods to a dealer at 10% profit and the dealer to his customer at 12.5% profit. How much does a customer pay above the original cost of goods purchased by him for Rs. 990?
Explanation:
Let Manufacturer’s price be M. Then,
(SP)manufacturer = (CP)dealer = 1.1 m
(SP)dealer = (CP)customer = (1.125) (1.1) m
i.e. (1.125) (1.1) m = 990 ⇒ m = 800
∴ customer paid Rs. (990 – 800) = Rs. 190 above the manufacturer’s prize.
Hence, option (c).
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