For a certain article if the discount is 10%, the profit is 10%. What is the profit if the discount is 5%?
The Usual Method
Let the cost price of the article be $100. Hence selling price = $110.
Hence marked price =
But when a discount of 5% is given, the marked price becomes =
Hence Profit = – 100 = %
Estimated Time to arrive at the answer = 60 seconds.
Approximating, we can guesstimate that if the discount is 10%, the gap between the marked price and the cost price is 20%. Now if the discount is only 5% the gap between the cost price and selling price = 15%. However, the discount being calculated on the marked price and profit % on the cost price (cost price < marked price in this case since profit is generated), the actual gap will be slightly more than 15%. Hence 16%.
Estimated Time to arrive at the answer = 10 seconds.