An article was bought for ₹8,900. Its price was marked up by 40%. Thereafter, it was sold at a discount of 5% on the marked price. What was the profit percentage on the transaction?

The correct answer is 33%.

Step 1: Understand the given data

Cost Price (CP) of the article = ₹8,900

Markup percentage = 40%

Discount percentage = 5%

Step 2: Calculate the Marked Price (MP)

The marked price is calculated by increasing the cost price by the markup percentage:

$\text{Marked Price (MP)}=\text{CP}\times (1+\frac{40}{100})$

$\text{MP}=8900\times 1.40=\text{₹12,460}$

Step 3: Calculate the Selling Price (SP)

A discount of 5% is offered on the marked price:

$\text{Selling Price (SP)}=\text{MP}\times (1-\frac{5}{100})$

$\text{SP}=12460\times 0.95=\text{₹11,837}$

Step 4: Calculate the Profit Percentage

Profit is the difference between Selling Price and Cost Price:

$\text{Profit}=\text{SP}-\text{CP}=11837-8900=\text{₹2,937}$

Now, calculate the profit percentage relative to the Cost Price:

$\text{Profit Percentage}=\left(\frac{\text{Profit}}{\text{CP}}\right)\times 100$

$\text{Profit Percentage}=\left(\frac{2937}{8900}\right)\times 100=33\%$

Alternative Shortcut Method:

Since the question asks for the overall percentage change, the actual cost price (₹8,900) is not required. We can use the effective percentage formula for consecutive changes:

$\text{Effective Percentage}=a+b+\frac{a\times b}{100}$

Here, markup percentage a = +40% and discount percentage b = -5%:

$\text{Profit Percentage}=40-5+\frac{40\times (-5)}{100}$

$\text{Profit Percentage}=35-\frac{200}{100}=35-2=33\%$

Thus, the overall profit percentage is 33%.