Question

A person bought an item for Rs. 1350 and spent Rs. 150 towards transportation of the item. Then he sold it for Rs. 1800. The profit percentage is:

• A. 25%
• B. 15%
• C. 20%
• D. 10%

Hint:

Always calculate your profit percentage based on the final total cost price, not the initial purchase price. $$\text{Ratio of Cost to Profit} = 1500 : 300 \Rightarrow 5 : 1$$ Since $\frac{1}{5}$ corresponds to exactly $20\%$, you can identify the correct answer choice without tedious scratch calculations.

Answer 1

The Correct Option is C

Concept: In commercial arithmetic, any overhead investments such as transportation, maintenance, repairs, or labor costs incurred immediately after purchasing an item must be added directly to the raw purchase price. The net metric used to evaluate gains or losses is the Total Cost Price ($\text{CP}_{\text{total}}$). $$\text{Profit} = \text{Selling Price (SP)} - \text{Total Cost Price (CP)}$$ $$\text{Profit Percentage (\%)} = \left( \frac{\text{Profit}}{\text{Total Cost Price}} \right) \times 100$$

Step-by-step Explanation:

Step 1: Calculate the effective Total Cost Price ($\text{CP}_{\text{total}}$).
The individual spent an initial purchase amount of Rs. 1350 and sustained an additional transportation expense of Rs. 150. $$\text{Total Cost Price } (\text{CP}_{\text{total}}) = \text{Purchase Price} + \text{Transportation Cost}$$ $$\text{Total Cost Price } (\text{CP}_{\text{total}}) = \text{Rs. } 1350 + \text{Rs. } 150 = \text{Rs. } 1500$$

Step 2: Establish the final Selling Price (SP).
The asset was exchanged later for a total value of: $$\text{Selling Price } (\text{SP}) = \text{Rs. } 1800$$

Step 3: Determine absolute monetary Profit.
Since the selling price exceeds the total cost price ($\text{SP} \gt \text{CP}_{\text{total}}$), the transaction yielded a net financial gain: $$\text{Profit} = \text{SP} - \text{CP}_{\text{total}}$$ $$\text{Profit} = 1800 - 1500 = \text{Rs. } 300$$

Step 4: Compute the relative Profit Percentage.
By dividing the absolute profit by our calculated total cost baseline, we convert this value into a percentage: $$\text{Profit Percentage} = \left( \frac{300}{1500} \right) \times 100$$ Simplifying the primary fraction by dividing both numbers by 300: $$\frac{300}{1500} = \frac{1}{5}$$ Now, multiply by 100 to find the final percentage: $$\text{Profit Percentage} = \frac{1}{5} \times 100 = 20\%$$