A dealer lists his goods at 40% above cost price and allows a discount of 20%. His profit is:

Correct option is D

Given:

The dealer lists his goods at 40% above the cost price.

The dealer allows a discount of 20%.

Formula Used:

Profit % $$= \frac{\text{Profit}}{\text{Cost Price}} \times 100$$

Solution:
Let the cost price of the goods be C.

Marked price (M)  $$= C + 40\% \, \text{of} \, C = 1.40C$$​​

Selling price (S)  $$= M - 20\% \, \text{of} \, M = 0.80M$$​​

​Substitute M = 1.40C into the equation:

​$$S = 0.80 \times 1.40C = 1.12C$$​
The profit is the difference between the selling price and the cost price:

Profit = S − C = 1.12C – C = 0.12C

Profit percentage =$$\frac{\text{Profit}}{\text{Cost Price}} \times 100 = \frac{0.12C}{C} \times 100 = 12\%$$

Alternate Method:

Profit % = $$\frac{12x}{100x}\times 100 = 12\%$$​​