A trader marks an item 40% above the cost price and then offers a 20% discount on the marked price. What is the trader's actual percentage profit?

Answer and explanation

Correct answer: C. 12%

  1. Step 1: Let the cost price be .
  2. Step 2: Marked price: .
  3. Step 3: Selling price after 20% discount: .
  4. Step 4: Percentage profit: .
Answer
12%.
Why not the others: '20%' subtracts percentages directly (), which is mathematically incorrect; '16%' calculates ; '24%' is an arithmetic error.

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