If the cost price of an article is ₹400 and it is sold at 20% profit, what is the selling price?

Appeared in: AIIMS Delhi NO- 2019

Explanation

The core formula to find the selling price with a profit is: Selling Price = Cost Price + Profit.
First, calculate the profit amount, which is 20% of the cost price (₹400). This is calculated as (20/100) * 400 = ₹80.
Next, add this profit amount to the original cost price to find the final selling price: ₹400 + ₹80 = ₹480.

Option A: This selling price corresponds to a profit of only ₹40, which is a 10% profit margin, not 20%.
Option B: This selling price corresponds to a profit of ₹60, which is a 15% profit margin, not 20%.
Option D: This selling price corresponds to a profit of ₹100, which is a 25% profit margin, not 20%.

Clinical Relevance

Nursing practice connection: This is primarily an exam-oriented knowledge point with limited direct bedside application, so retain Calculating selling price based on cost price and profit percentage as background academic context rather than a clinical decision trigger.
Understanding profit and loss is a fundamental skill for basic financial literacy, essential for managing personal finances and business transactions.
This concept is frequently tested in the aptitude sections of competitive exams, including those for nursing recruitment, to assess numerical ability and problem-solving skills.
What if the question asked for the price after a 20% loss? The calculation would be to subtract the loss from the cost price: ₹400 - ₹80 = ₹320.

How to Approach the Question

Step 1: Identify the given values in the question: Cost Price (CP) = ₹400 and Profit Percentage = 20%.
Step 2: Understand what needs to be calculated: the Selling Price (SP).
Step 3: Recall the formula for profit amount: Profit = (Profit % / 100) * CP.
Step 4: Calculate the profit: (20 / 100) * 400 = ₹80.
Step 5: Recall the formula for selling price when there is a profit: SP = CP + Profit.
Step 6: Calculate the final answer: SP = 400 + 80 = ₹480 and match it with the given options.

Concept Tested & Keywords

Concept Tested: Calculating selling price based on cost price and profit percentage.
Stem keywords: cost price, ₹400, sold, 20% profit
Lead-in keywords: what is the selling price

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