Question: If a seller marks up the price of a product by 50% and then offers a discount of 20%, what is the effective percentage increase in the price?

Options:

1. 30%
2. 25%
3. 20%
4. 15%

Correct Answer: 25%

Solution:

Let the cost price be $100. Marked Price = $100 + ($100 * 0.50) = $150. Selling Price after discount = $150 - ($150 * 0.20) = $120. Effective increase = (($120 - $100) / $100) * 100 = 20%.