Calculating the percentage of water to mix to achieve a specific profit margin

Let the cost price of 1 litre of pure honey be ₹100. To make a profit while selling at this exact cost price, the entire profit margin must come entirely from the volume of free water added.

To achieve a 20\% profit on a 1-litre transaction, the seller must generate an extra volume equivalent to 20\% of the base honey amount. Water needed = 20\% of 1 litre = 0.2 litres.

The question asks what percent of water must be mixed relative to the honey base to achieve this gain fraction, which corresponds to exactly 20\%.

Answer: (a).