The list price of an article is 50 % more than its original...

The list price of an article is $50 \%$ more than its original cost price. The shopkeeper allowed a discount of $20 \%$ and charged a sales tax of $20 \%$ on it. Finally the buyer paid $\mathrm{Rs} 2880$. What is the cost price of the article? (1) $\mathrm{Rs} 2500$ (2) $\operatorname{Rs} 3500$ (3) $\operatorname{Rs} 3000$ (4) $\mathrm{Rs} 2000$

The list price of an article is $50 \%$ more than its original cost price. The shopkeeper allowed a discount of $20 \%$ and charged a sales tax of $20 \%$ on it. Finally the buyer paid $\mathrm{Rs} 2880$. What is the cost price of the article?
(1) $\mathrm{Rs} 2500$
(2) $\operatorname{Rs} 3500$
(3) $\operatorname{Rs} 3000$
(4) $\mathrm{Rs} 2000$

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Key Concepts

Markup

Markup is the process of increasing the cost price of an item by a certain percentage to determine its list price. This concept explains how sellers add a percentage of the cost price to set a higher initial selling price before any discounts.

Discount

A discount is a reduction in the listed price of an item, usually expressed as a percentage. It serves to lower the price that customers actually pay, as compared to the marked price, and is applied before additional charges such as taxes.

Sales Tax

Sales tax is a percentage-based charge applied to the selling price of an item after discounts are applied. This tax increases the final amount the customer pays and is typically mandated by the government.

Percentage Change and Reverse Calculation

This concept involves using successive percentage adjustments to work from an original value through various increases and decreases to a final value. Reverse calculations are then used to determine the original amount when the final amount and the series of percentage changes are known.

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