Cost of pen is P.
Sold at 1.10P (10% more). There is an ambiguity in the question, hence two solutions:
(1) If cp 5% less than P, then it would have cost 0.95P; if sold at R7 more: 0.95P*1.2 (20% more than 0.95P)-0.95P=7.
0.95P(1.2-1)=7; 0.95*0.2P=7, P=7/0.19=R36.84.
(2) If cp 5% less than 1.10P then the new cp would be 0.95*1.10P=1.045P.
If sold at R7 more, 1.045P*0.2=7, P=7/0.209=R33.49.