Rahul buys a Nokia mobile handset; the shopkeeper offers a 5% discount on the actual sale price and Rahul pays Rs. 3325 without tax, also avoiding a 20% tax that would have been charged on the billed amount; what is the total amount of discount and tax saved by Rahul compared to paying full price with tax?

Introduction / Context:
This profit and loss question combines discount and tax calculation. Rahul negotiates a discount on the mobile phone and also manages to avoid paying tax that would normally be applied if he asked for a bill. The objective is to compare what he actually pays with what he would have paid without discount and with tax, and then compute the total benefit in rupees. Understanding such questions is useful for both competitive exams and day to day shopping decisions.

Given Data / Assumptions:

• Let the actual sale price or list price of the mobile be P rupees.
• The shopkeeper offers a 5% discount on this price.
• Rahul finally pays Rs. 3325 without any tax.
• If Rahul had insisted on a bill, he would have had to pay 20% tax.
• The 20% tax is applied on the sale price (without discount) under usual interpretation.
• We need to find the total amount of benefit Rahul gains, combining both discount and avoided tax.

Concept / Approach:
First, we use the discount information to compute the original list price P. If Rahul receives a 5% discount and pays Rs. 3325, then 3325 is equal to 95% of P. Once we find P, we calculate the amount that would have been payable under normal conditions, that is, full price plus 20% tax. Finally, we compare that full amount with the 3325 actually paid to get the total discount and tax saved. The difference between these two amounts is exactly the benefit Rahul receives.

Step-by-Step Solution:
Step 1: Let the original sale price of the mobile be P.Step 2: Rahul gets a 5% discount, so he pays 95% of P.Step 3: Therefore, 0.95 * P = 3325.Step 4: Solve for P: P = 3325 / 0.95.Step 5: Compute P: 3325 / 0.95 = 3500. So the list price of the mobile is Rs. 3500.Step 6: If no discount and with tax, Rahul would pay the full list price plus 20% tax.Step 7: Tax at 20% on 3500 = 3500 * 0.20 = Rs. 700.Step 8: Hence, the amount payable with bill and without discount = 3500 + 700 = Rs. 4200.Step 9: Rahul actually pays Rs. 3325 without tax.Step 10: Total benefit (discount plus tax saved) = 4200 - 3325.Step 11: Compute the difference: 4200 - 3325 = Rs. 875.

Verification / Alternative check:
We can separately identify the discount and tax components. Discount amount = 5% of 3500 = 0.05 * 3500 = Rs. 175. Potential tax he avoided = 20% of 3500 = Rs. 700. Sum of these savings = 175 + 700 = Rs. 875. This total matches the earlier difference between full payment with tax and his actual payment. Therefore, both reasoning paths yield the same amount, confirming that the answer is correct and consistent.

Why Other Options Are Wrong:

• Rs. 750: This could arise from adding only the tax saved and an incorrect value for discount, but it does not match proper calculations.
• Rs. 375: This is too small, close to only part of the discount or a miscalculated combined benefit.
• Rs. 525: This could come from incorrect interpretation of how tax and discount interact, but again it does not match the actual numbers.

Common Pitfalls:

• Applying the 20% tax on the discounted price instead of the full list price, which changes the interpretation of the question.
• Forgetting that Rahul saves both the discount amount and the full tax amount, not just one of them.
• Miscomputing the list price from the discounted payment by not dividing by 0.95 correctly.

Final Answer:
Rahul gains a total benefit of Rs. 875 through the combination of discount and avoided tax.