Anna sells his car to Boney at a 20% profit; Boney sells to Chakori at a 10% profit; Chakori sells to a mechanic at a 9.09% loss; the mechanic spends 10% on repairs and sells at an 8.33% profit back to Anna. What is Anna’s overall loss percentage?

Difficulty: Medium

Correct Answer: 23%

Explanation:


Introduction:
Track value through successive percentage changes. Use a convenient base cost for Anna initially, propagate sale prices and costs through the chain, and finally compare Anna’s buyback price with his original outlay to express the net loss percentage for the full round trip.


Given Data / Assumptions:

  • Let Anna’s original cost = 100 (arbitrary base)
  • Anna sells to Boney at +20% ⇒ 120
  • Boney sells to Chakori at +10% ⇒ 132
  • Chakori sells to mechanic at −9.09% (= 1/11) ⇒ 132 * (10/11) = 120
  • Mechanic spends 10% of purchase price ⇒ 120 + 12 = 132 cost basis
  • Mechanic sells at +8.33% (= 1/12) ⇒ 132 * (13/12) = 143 back to Anna


Concept / Approach:
Compare Anna’s final buyback price (143) with his original cost (100). The extra cash outflow over the cycle reflects his net loss relative to the initial base.


Step-by-Step Solution:
Original cost (Anna) = 100; buyback price = 143Overall loss in % relative to original = (143 − 120) with respect to 100? Consider the round trip: Anna received 120 upon selling, later paid 143 to reacquire.Net cash loss over the cycle = 143 − 120 = 23Expressed as % of Anna’s original cost (100): 23%


Verification / Alternative check:
Using actual rupees scales the same way due to percentage chaining; 1/11 and 1/12 are exact reciprocals of 9.09% and 8.33% approximations, ensuring arithmetic consistency.


Why Other Options Are Wrong:
29%/40%/50% are not supported by the exact chain multipliers.


Common Pitfalls:
Comparing 143 directly to 100 (which suggests 43% difference, not the correct net cash loss metric for the round trip).


Final Answer:
23%

More Questions from Profit and Loss

Discussion & Comments

No comments yet. Be the first to comment!
Join Discussion