The ratio of the cost price and marked price of an article is 7:10, respectively. The article is sold after giving a discount of Rs. 400 such that there is a profit of 25%. Find the amount by which the article is marked up above its cost price.
Let the cost price and marked price of the article be Rs. 7x and Rs. 10x, respectively Therefore, selling price of the article = 1.25 × 7x = Rs. 8.75x According to the question, 10x – 8.75x = 400 Or, x = 400/1.25 = 320 Therefore, amount by which article is marked up above its cost price = 10x – 7x = 3x = Rs. 960
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