880 - Math - Problem Solving

Question: Two merchants sell, each an article for Rs.1000. If Merchant A computes his profit on cost price, while Merchant B computes his profit on selling price, they end up making profits of 25% respectively. By how much is the profit made by Merchant B greater than that of Merchant A?

1. Rs.66.67
2. Rs. 50
3. Rs.125
4. Rs.200