A milkman has 20 litres of pure milk. He mixes 5 litres of water (available free of cost) into the 20 litres of milk and sells the entire 25 litre mixture at ₹18 per litre (the cost price per litre of pure milk). What is his percentage profit on the transaction?

Introduction / Context:
This question tests profit calculation in adulteration problems. The milkman’s cost is only for milk, while water is free. By adding water, he increases the sellable volume without increasing cost. If he sells the entire mixture at the original milk price per litre, he earns extra revenue, which becomes profit.

Given Data / Assumptions:

• Pure milk quantity = 20 litres
• Water added = 5 litres (free)
• Selling price = ₹18 per litre (same as milk cost price per litre)
• Entire mixture is sold (25 litres total)

Concept / Approach:
Total cost = cost of milk only. Total revenue = selling price per litre * total litres sold. Profit% = (profit / cost) * 100.

Step-by-Step Solution:

Verification / Alternative check:
Another way: the extra 5 litres are “free inventory.” Selling them at ₹18 per litre adds ₹90 extra revenue, which is pure profit. Profit on original cost ₹360 is 90/360 = 1/4 = 25%.

Why Other Options Are Wrong:

Common Pitfalls:
Students sometimes compute profit% on selling price instead of cost price. Others mistakenly treat the mixture selling price as “cost price of mixture,” which would be ₹360/25 = ₹14.4 per litre, not ₹18. Always separate cost of inputs from selling rate.

Final Answer:
25%