Sunil purchased a microwave oven for ₹7,000. He spent ₹400 on its transportation and ₹600 on repairs. He sold the oven for ₹9,800…

Question

Sunil purchased a microwave oven for ₹7,000. He spent ₹400 on its transportation and ₹600 on repairs. He sold the oven for ₹9,800. What is his percentage profit on total investment?

1. A. 22.5% (Correct answer)
2. B. 23.5%
3. C. 20.5%
4. D. 21.5%

Correct Answer

Option A — 22.5%

Detailed Solution & Explanation

The correct answer is 22.5%.

Shortcut Trick

• Profit percentage is always measured on total investment, not the purchase price alone.
• Total cost $= 7000 + 400 + 600 = ₹8{,}000$; profit $= 9800 - 8000 = ₹1{,}800$.
• $\dfrac{1800}{8000} \times 100 = \textbf{22.5\%}$

Alternate Method

• Recognise $₹1{,}800$ as a fraction of $₹8{,}000$: $\dfrac{1800}{8000} = \dfrac{9}{40}$.
• $\dfrac{9}{40} = \dfrac{22.5}{100} = \textbf{22.5\%}$

Additional Information

• Overheads count as cost. Transport, repairs, freight, labour and installation all join the cost price; ignoring them here gives $\frac{2800}{7000} = 40\%$, which is why the question includes them.
• The standard formulation is $\text{Profit\%} = \dfrac{SP - CP}{CP} \times 100$, where $CP$ means total cost.
• Profit percentage is computed on cost price; discount percentage is computed on marked price. Mixing the two bases is the most common error across this whole topic.