Net profit is Rs 160,000. Reserve is 10% of profit, and A's commission is 5% on the profit remaining after the reserve is set aside. What is A's commission?

Correct answer: 7200

Step 1: Compute the reserve = 10% of Rs 160,000 = Rs 16,000. Remaining profit = Rs 160,000 − Rs 16,000 = Rs 144,000. Commission = 5% of Rs 144,000 = Rs 7,200, so option A is correct. A common wrong approach (option B: Rs 8,000) is to calculate 5% on the full profit instead of on the profit after reserve. Exam tip: always deduct reserve and other prior charges first, then apply percentage-based commissions to the remaining amount.