With the profit margin increased, a traders earns 25% more than before. If his earnings now are $800 per month, what was it before?
The Usual Method
Let the earning of the trader initially be $x. With an increase in the margins, the earning is now $1.25x
But 1.25x = $800
Estimated Time to arrive at the answer = 30 seconds.
If earning increase by 25%, to get the original earnings, the new earning should be reduced by 20% (See concept explained in the section of Percentages Stuff to Remember)
Thus old earnings = $800 less 20% = 800 – 160 = 640
Hence option ‘3’.
Estimated Time to arrive at the answer = 10 seconds.