A trader marked the price of his commodity so as to include a profit of 25%. He allowed discount of 16% on the marked price. His actual profit was

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16%

25%

answer is A.

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Detailed Solution

$\begin{array}{rcl} P r o f i t & = & (\frac{125 x}{100} - \frac{16}{100} (\frac{125 x}{100})) - x \\ = & (\frac{125}{100}) (\frac{84}{100}) x - x \\ = & 1.05 x - x \\ = & 0.05 x \end{array}$

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