A manufacturer sells an item to a wholesale dealer at a profit of 10%. The wholesaler sells it to a retailer at a profit of 20%. If the retailer pays ₹1,320 for it, find the cost price for the manufacturer.

Solution

Solution: Let the manufacturer's cost price be CP. The retailer's price is \(CP\times1.10\times1.20=1320\). Thus, \(CP=\frac{1320}{1.10\times1.20}=\frac{1320}{1.32}=1000\). Therefore, the manufacturer's cost price is ₹1,000. Trick: Successive profits are multiplied, not added.