Markup followed by discount: A shopkeeper marks goods 20% above cost price and later allows a 5% discount on the marked price. What is the net profit or loss percent?

Introduction / Context:This problem uses successive percentage changes on price: first an increase (markup), then a decrease (discount). The combined effect determines profit or loss relative to cost price.

Given Data / Assumptions:

• Cost Price (CP) = 100 (assumed for ease).
• Markup = +20% ⇒ Marked Price (MP) = 120.
• Discount = 5% on MP ⇒ Selling Price (SP) = 120 * 0.95.

Concept / Approach:Compute SP after both operations. Profit % = (SP − CP) / CP * 100%.

Step-by-Step Solution:

Verification / Alternative check:Use factors: net factor = 1.20 * 0.95 = 1.14 ⇒ 14% profit directly.

Why Other Options Are Wrong:

• All others mismatch the exact net factor 1.14.

Common Pitfalls:Subtracting 5% from 20% to get 15% profit; discounts apply on the increased base, so you must multiply factors.

Final Answer:14% (profit)