A milk merchant buys 50 litres of milk at the rate of Rs 40 per litre and mixes 5 litres of water in it. If he sells this mixture at the rate of Rs 42 per litre, then what is the profit percentage for the dealer?

Step 1: Understand the initial purchase

• The milk merchant buys 50 liters of milk at Rs. 40 per liter.
• Total cost price = 50 × 40 = Rs. 2000

Step 2: Mixture preparation

• The merchant adds 5 liters of water, which is free (no cost).
• Total mixture quantity = 50 + 5 = 55 liters

Step 3: Selling price of the entire mixture

Selling Price = 55 × 42 = Rs. 2310

Step 4: Calculate Profit

Profit = Selling Price - Cost Price = 2310 - 2000 = Rs. 310

Step 5: Calculate Profit Percentage

Profit % = (Profit / Cost Price) × 100
         = (310 / 2000) × 100
         = 15.5%

Answer: 15.5%

The milk merchant earns a profit of 15.5% by adding 5 liters of water and selling the entire mixture at Rs. 42 per liter.

This type of question tests your understanding of basic profit and loss concepts combined with mixture manipulation. By using a cost-free additive like water, the merchant increases the volume and therefore the selling price, without increasing cost — a strategy often used in real-world scenarios and widely asked in aptitude exams.