The cost price (CP) of a toy is 1/5th of the selling price (SP) of a watch. A discount of 20% was given on the watch. If the cost price of the toy is ₹100, what is the marked price (MP) of the watch?

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  1. ₹475
  2. ₹500
  3. ₹625
  4. ₹700
  5. ₹750

Answer (Detailed Solution Below)

Option 3 : ₹625
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Detailed Solution

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Step 1: Given:

CP of toy = ₹100

CP of toy = 1/5 × SP of watch

⇒ 100 = (1/5) × SP of watch

⇒ SP of watch = 100 × 5 = ₹500

A discount of 20% was given on the watch.

⇒ SP = MP × (1 − 20%) = MP × 0.8

We know SP = ₹500

⇒ 500 = MP × 0.8

⇒ MP = 500 ÷ 0.8 = ₹625

Thus, the correct answer is ₹625.

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