Use multipliers:
The normal price the shop would sell the racquet for is:
1.6 * 200 = 320
'1.6' is the multiplier that I got using the percentage. Multiplying a value by 1.6 is the same as increasing the value by 60%. If you multiplied it by 0.1 (which is the same as dividing by 10), you would get just 10% of the value.
Back to the question, now we can use the multiplier 0.75 because we are are reducing the price by 25% (0.25 as a decimal), so:
320 * 0.75 = 240
And now we want just the profit so we take off how much it cost the shop to buy ($200): 240 - 200 = 40
R=i/pt
R=16/200*2=0.04*100=4%
I think the answer should be False! Because the induction it is not kind of thinking with using their specific answers from the general rule.
Hope it helped!
