A trader sold an article for ₦7,200 making a profit of 20%. Find the cost price.

**The reasoning** When you make a 20% profit, you're selling for MORE than the cost price. The selling price = cost price + profit. Here's the key principle: **Selling price = Cost price × (1 + profit%/100)** So: ₦7,200 = Cost price × (1 + 20/100) ₦7,200 = Cost price × 1.2 Therefore: Cost price = ₦7,200 ÷ 1.2 = **₦6,000** Or think of it this way: If the cost price is 100%, then selling at 20% profit means you sold at 120% of the cost price. So ₦7,200 represents 120%, and you need to find 100%. **Why the wrong options tempt you** - **A (₦5,760)**: You calculated 20% of ₦7,200 and subtracted it—but that's wrong because 20% profit is based on the *cost price*, not the selling price. - **C (₦6,400)**: Random calculation error, possibly confusing the percentages. - **D (₦8,640)**: You added 20% of ₦7,200 to it—backwards! That would give a new selling price. **Quick takeaway** When profit % is given, remember: selling price = cost price × (1 + profit% ÷ 100), so always divide the selling price by 1.2 (or whatever multiplier) to find the original cost.