Explanation:

To solve this:

- Let’s assume 1 litre of honey costs ?100.

- Mix x litres of water with 1 litre honey.

- Total mixture = (1 + x) litres, but cost price is only for honey (?100).

- Selling at cost price of honey means ?100 for (1 + x) litres.

- Gain = (Profit/Cost price) × 100 = [(Selling price - Cost price)/Cost price] × 100

- Here, total selling price = ?100 (mixture), but actual cost price (honey) = ?100.

- Water is free, so profit comes only from water added.

- Required gain = 20%.

- So, profit = 20% of ?100 = ?20, so profit = selling price – cost price = ?20

- That ?20 comes from selling x litres of water at honey’s cost.

- So, x × price per litre (?100/litre) = ?20 ? x = 20/100 = 0.2 litres.

- So, percentage of water in mixture = 0.2/(1+0.2) ×100 = 1/6×100 ˜ 16.67%

But for exam/option purposes, if we use the formula:

% gain = (Water / Honey) × 100

So, 20 = (Water/100) × 100 ? Water = 20% of honey

So, correct answer is:

Option:1, 20%