Profit and Loss – Markup followed by discount (net gain): A trader lists articles 20% above cost price and allows a 10% discount on the marked price for cash payment. What is his net percentage gain?

Introduction / Context:
Markup increases price relative to cost; discount reduces marked price for the buyer. The net effect is multiplicative and yields a gain when the product exceeds 1.00.

Given Data / Assumptions:

• Marked price = 1.20 * CP
• Discount on MP = 10% ⇒ SP = 0.90 * MP

Concept / Approach:
Compute the net factor SP/CP = 0.90 * 1.20 = 1.08. Net gain% = (1.08 − 1) * 100.

Step-by-Step Solution:
SP = 0.90 * 1.20 * CP = 1.08 * CPGain% = 8%

Verification / Alternative check:
Let CP = 100 ⇒ MP = 120 ⇒ SP after discount = 108 ⇒ gain 8.

Why Other Options Are Wrong:
10% and 12% do not match the computed factor; 6% and 5% are too low.

Common Pitfalls:
Subtracting percentages directly (20 − 10 = 10%) instead of multiplying factors.

Final Answer:
8%