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GATE 2020 ME (ME2) – Question 5

General Aptitude · Quantitative Aptitude: Arithmetic and Number Computation · 1 mark · Multiple choice

A linear supply chain has five levels P → Q → R → S → T → Customers. At each level the product price increases by 25%. Production cost at P is ₹120/unit. Find the price paid by customers (rupees).

  1. 187.50
  2. 234.38
  3. 292.96
  4. 366.21

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Correct answer: (D) 366.21

Explanation

Each markup multiplies the preceding price by 1.25. Five levels therefore give 120(1.25)⁵=366.2109375, or **₹366.21, D**. Applying five markups to the original cost without compounding would understate the result.