If a man buys 1 lt of milk for Rs.12 and mixes it with 20% water and sells it for Rs.15, then what is the percentage of gain?

Step 1: Understand the Cost and Selling Price

• The man buys 1 liter of pure milk for Rs.12.
• He mixes it with 20% water, meaning he adds 0.2 liters of water.
• Total quantity becomes 1 + 0.2 = 1.2 liters.
• Since water is free, the cost price remains Rs.12 for 1.2 liters.

Step 2: Selling Price

• He sells the entire 1.2 liters at Rs.15.
• So, Selling Price = Rs.15

Step 3: Profit Calculation

Profit = Selling Price - Cost Price
       = Rs.15 - Rs.12
       = Rs.3

Step 4: Profit Percentage

Profit % = (Profit / Cost Price) × 100
         = (3 / 12) × 100
         = 25%

Answer: 25%

The man makes a profit of 25% by adding 20% water to the milk and selling the mixture at Rs.15.

This is a common question in aptitude tests and real-world business examples. It demonstrates how adding a free substance like water can increase the volume of a product and thus generate profit, even when the selling price per liter seems reasonable.