If selling price is Rs 100 more than the cost price and profit is 20%, then what is the cost price?

Options

A. 600
B. 1000
C. 800
D. 500

Answer

To solve the problem step by step, we can follow these instructions:

### Step 1: Understand the relationship between Selling Price (SP), Cost Price (CP), and Profit.
We know that:
- Selling Price (SP) = Cost Price (CP) + Profit

### Step 2: Define the variables.
Let:
- Cost Price (CP) = x
- Selling Price (SP) = x + 100 (since SP is Rs 100 more than CP)

### Step 3: Use the profit percentage to express profit in terms of CP.
We know that profit is 20% of the Cost Price:
- Profit = 20% of CP = 0.20 * x

### Step 4: Set up the equation using the profit information.
From the relationship defined in Step 1, we can express profit as:
- Profit = SP - CP
Substituting the values we have:
- 0.20 * x = (x + 100) - x

### Step 5: Simplify the equation.
This simplifies to:
- 0.20 * x = 100

### Step 6: Solve for x (Cost Price).
To find x, we can rearrange the equation:
- x = 100 / 0.20
- x = 500

### Conclusion:
The Cost Price (CP) is Rs 500.

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