A merchant marks his good at Rs. 300 and allows a discount

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A merchant marks his good at Rs. 300 and allows a discount of 25%. If he still gains 12.25%, then the cost price of article is :

1. 220
2. 200
3. 240
4. 260

Correct Option: B

Let's assume the cost price be (CP) = x
So selling price (SP) = 112.5x
Price marked on good ( MP ) = 300

According to question MP - 25% = SP
∴ x = 200, hence the cost price be Rs. 200.