A shopkeeper allowed 10% discount on his goals to make 20% profit If he sold a watch for
Rs.10,170 with 13 %. VAT, by what percent
is the discourt to be increased to make only
12% profit

To make only 12% profit, the discount should be increased to 16%

Step-by-step explanation:

The given information are;

The percentage discount on goods = 10%

The profit made from the sale of the watch = 20%

The amount the watch was sold = Rs.10,710

The percentage VAT included = 13%

Let the recommended selling price of the watch = X

Therefore, we have;

The price after 10% discount = 0.9×X

Which gives;

The amount the watch was sold = Price after 10% discount + Price after 10% discount ×VAT

The amount the watch was sold = 0.9×X + 0.9×X×13% = 0.9×X + 0.9×X×0.13

Rs.10,710 = 0.9×X + 0.9×X×0.13 = 1.017×X

X = Rs.10,170/1.017 = Rs. 10,000

The recommended selling price of the watch = Rs. 10,000

The profit was 20% of selling price which gives;

Profit = Selling price - Cost price = Rs. 9,000  - Rs. X = 0.2 × Rs. X

9000 - X = 0.2×X

9000 = X + 0.2×X  = 1.2×X

X = 9000/1.2 = Rs. 7,500

To make only 12% profit, we have;

12% of Rs. 7,500 = 0.12 × Rs.7,500 = Rs. 900

Selling price = Cost price + Profit = Rs. 7,500 + Rs. 900 = Rs. 8,400

Percentage discount from Rs.10,000 to get Rs. 8,400 is given as follows;

Percentage discount = Y%

Therefore;

Y = (10,000 - 8,400)/10000 × 100 = 0.16 × 100 = 16%

Y = 16%

Therefore, to make only 12% profit, the discount should be increased to 16%.

step-by-step explanation:

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