A trader marked the price of a commodity so as to include a profit of 25% , but allow discount of 16% on the marked price. His actual profit will be = ?

Answer: Option C

Let CP be Rs. 100. Then, marked price = Rs. 125
$$\begin{array}{rl}& \text{SP}=84\%\text{of}\text{Rs}\text{.}125\\ & =\text{Rs}\text{.}\left(\frac{84}{100}\times 125\right)\\ & =\text{Rs}\text{.}105\end{array}$$
∴ Profit = (105 - 100)% = 5%