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Answer: 5% profit / 5% लाभ

Explanation: The standard mathematical logic for such a problem dictates that the faulty balance “indicates 1250 gm for a true 1000 gm” (meaning when he claims to sell 1250g, he actually only gives out 1000g).

Let the cost price of 1000g be Rs 1000. While buying, he takes 20% more weight, getting 1200g for Rs 1000.

This makes his actual Cost Price (CP) of 1000 gm = 1000 × (1000/1200) = Rs. 2500/3.

While selling, he sells at 30% below the cost price of the indicated weight (1000g).

So, Selling Price (SP) of 1000gm = 70% of Rs 1000 = Rs 700.

But his balance shows 1250 gm for actual weight of 1000gm. So he actually charges for 1250 gm at the discounted price per gram.

⇒ SP of 1000 gm = Rs. 1250 × (700/1000) = Rs. 875

⇒ Profit = 875 – 2500/3 = 125/3

⇒ % of Profit = (125/3 × 100)/(2500/3) = 5%

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