A house has a list price of Rs 8 lakh. Kamal gets successive discounts of 20% and 10% (cash). He then spends 10% of the cost price on interiors and lawn. At what selling price should he sell to earn a 25% profit?

Introduction:
Successive discounts multiply, not add. After computing the effective purchase price, we add post-purchase expenditure (as a percentage of cost) to get the total cost base. Finally, we apply the target profit on this base to find the required selling price.

Given Data / Assumptions:

• List price = Rs 8,00,000
• Discounts: 20% then 10%
• Additional spend = 10% of cost price
• Desired profit = 25% on total cost

Concept / Approach:
Effective discount factor = 0.8 * 0.9 = 0.72. Add 10% of CP to get total cost. Then multiply by 1.25 to reach the target selling price.

Step-by-Step Solution:
Initial CP = 8,00,000 * 0.72 = 5,76,000Additional spend = 10% of 5,76,000 = 57,600Total cost = 5,76,000 + 57,600 = 6,33,600Required SP = 1.25 * 6,33,600 = 7,92,000

Verification / Alternative check:
Profit = 7,92,000 − 6,33,600 = 1,58,400, which is 25% of 6,33,600.

Why Other Options Are Wrong:
9 lakh too high (exceeds 25% on total cost). 7.99 lakh is not exact; correct figure is 7.92 lakh.

Common Pitfalls:
Adding discounts (20% + 10% ≠ 30%); applying 10% interior cost to list price instead of to CP.

Final Answer:
Rs. 7.92 lakh