A man buys a mobile phone for $800 and sells it for $1,000. What is his profit as a percentage of the cost price?

• A. 20%
• B. 25%
• C. 30%
• D. 35%

Answer: (B)

To determine the profit as a percentage of the cost price, we first calculate the profit made from the transaction. The profit is found by subtracting the cost price from the selling price.

In this case:

• The cost price of the mobile phone is $800.

• The selling price is $1,000.

Calculating the profit:

Profit = Selling Price - Cost Price

Profit = $1,000 - $800

Profit = $200

Next, to find the profit as a percentage of the cost price, we use the formula:

Profit Percentage = (Profit / Cost Price) × 100%

Substituting in the values we have:

Profit Percentage = ($200 / $800) × 100%

Calculating this further:

Profit Percentage = 0.25 × 100%

Profit Percentage = 25%

Thus, the profit as a percentage of the cost price is 25%. This is why the correct answer is recognized as being 25%. The calculation effectively shows how profit percentages are derived from the profit made in relation to the original investment or cost price.