In a transaction, profit percentage is 20% of the cost. If the cost increases by 5% but selling price remains the same, what is the new profit percentage?

Correct option is B

Given:

Initial profit = 20% of cost

Cost increases by 5%

Selling price remains the same

Formula Used:

Profit = Selling Price - Cost Price

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

Solution:​
Let original cost price = ₹100
Then profit = 20% of 100 = ₹20
So, Selling Price = 100 + 20 = ₹120
New cost price = ₹100 + 5% of 100 = ₹105
New profit = ₹120 − ₹105 = ₹15
New profit % =$$\frac{15}{105} \times 100 = 14.29\%$$​​