To solve this problem, let's assume the cost price (CP) of the horse is Rs. x.
Given that the person sells the horse at a loss of 12.5%, the selling price (SP) can be calculated as:
SP = CP - 12.5% of CP = CP - 0.125 * CP = 0.875 * CP
If the person sells the horse for Rs. 92.5 more, the selling price will be:
SP + Rs. 92.5 = 0.875 * CP + Rs. 92.5
Given that the new selling price results in a profit of 6%, we can set up the equation:
0.875 * CP + Rs. 92.5 = CP + 6% of CP
0.875 * CP + Rs. 92.5 = CP + 0.06 * CP
0.875 * CP - CP = 0.06 * CP - Rs. 92.5
-0.125 * CP = 0.06 * CP - Rs. 92.5
0.185 * CP = Rs. 92.5
CP = Rs. 92.5 / 0.185
CP = Rs. 500
Therefore, the cost price (CP) of the horse is Rs. 500.
The correct answer is A) Rs. 5000.