Q.A trader buys an article for ₹1,200 and wants to make a profit of 20%. At what price should it be sold?

A profit of 20% makes the selling price 120% of the cost price.

$SP=1200\left(1+\dfrac{20}{100}\right)=1200\times1.20=₹1440$.

Here $CP=₹1{,}200$ and the required profit is $20\%$ of the cost price.

Step 1 — Apply the selling-price formula.

Step 2 — Evaluate.

Check (independent verification). Profit $=1440-1200=₹240$, and $\dfrac{240}{1200}\times100=20\%$, as required.

Some students compute 20% of ₹1,200 (₹240) and stop there, reporting the profit as if it were the selling price. The selling price is the cost price plus this profit, ₹1,440.