A merchant buys goods at 25% off the list price (the usual price for
the goods). He wants to mark the goods so that after a 20% discount of
this marked price, 25% of the sale is profit.
What percent of the list price must he mark the goods?
Let L be the list price and P be the Merchant's marked price.
Merchant's cost = 0.75L
Merchant's discounted price = 0.80P
(This is just the price at which he finally sells the goods i.e.,
the final price to which he discounts the marked price so we have the
equation inter-relating these quantities:
That is, the merchant's marked price P is 125% of the list price L.