Answer:
[tex]Cost\ Price = 4331.25[/tex]
Step-by-step explanation:
Given
Selling Price = Sh. 4950
Profit = 12.5%
Required
Determine the cost price
Profit is calculated as:
[tex]Profit = \frac{Selling\ Price - Cost\ Price}{Selling\ Price} * 100\%[/tex]
Substitute values for Selling Price and Profit
[tex]12.5\% = \frac{4950 - Cost\ Price}{4950} * 100\%[/tex]
Cross Multiply:
[tex]4950 * 12.5\% = (4950 - Cost\ Price) 100\%[/tex]
[tex]\frac{4950 * 12.5\%}{100\%} = (4950 - Cost\ Price)[/tex]
[tex]618.75 = (4950 - Cost\ Price)[/tex]
Collect Like Terms
[tex]Cost\ Price = 4950 - 618.75[/tex]
[tex]Cost\ Price = 4331.25[/tex]
Hence, the cost price of the item is: Sh. 4331.25
