A dealer marks his goods at 20% above the cost price. The dealer then allows some discount and makes a profit of 14%. What is the discount rate

Correct option is D

Solution:

Let the cost price (C.P.) of the goods be ₹100.

The dealer marks his goods at 20% above the cost price. Therefore, the marked price (M.P.) is:

M.P. = 100 + 20% × 100 = 120

The dealer makes a profit of 14%. Therefore, the selling price (S.P.) is:

S.P. = 100 + 14% × 100 = 114

The selling price is also the marked price minus the discount. Therefore:

S.P. = M.P. - Discount

Substituting the values, we get:

114 = 120 - Discount

Solving for the discount:

Discount = 120 - 114 = 6

The discount percentage is calculated based on the marked price:

Discount percentage = ($$\frac{6 }{ 120}$$​) × 100 = 5%

Therefore, the discount rate is 5%.