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We have the cost at which the wrist watch was purchased by the dealer = Rs. 225

The overhead expenses that were taken up by the dealer = Rs. 15

The amount for which the wrist watch was sold by the dealer = Rs. 300

Hence the gain earned by the dealer = Rs 300-Rs (225+15) = Rs. (300-240) =Rs. 60

(Because the overhead charges are also taken up by the dealer, so, they also go into the cost price)

Hence the gain earned by the dealer is equal to Rs.60

Gain percentage is defined as the amount of gain earned per 100 units of cost price.

We have, the gain on Rs 60 of C.P = Rs. 240

Hence, we have,

The gain on Re. 1 of C.P $=\dfrac{60}{240}=\dfrac{1}{4}$

Hence gain per Rs. 100 of C.P $=\dfrac{1}{4}\times 100=25\%$

$gain\%=\dfrac{gain}{C.P}\times 100$

Substituting the values of gain and C.P, we get,

$gain\%=\dfrac{60}{240}\times 100=25\%$

Some students make mistakes by writing the total cost price as Rs. 225 - Rs. 15, but this is wrong as the cost spent for repair must be added to the cost price and not subtracted.