Basics of Profit and Loss-Part1

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Profit and Loss

Basic Definitions and Formulas

  • Cost price (C.P.): Buying price.
  • Selling price (S.P.): sales Price.
  • Profit/Gain: If the selling price is more than the cost price, the difference between them is the profit occurred.
Formula: Profit/ Gain = S.P. – C.P.
  • Loss: If the selling price is less than the cost price, the difference between them is the loss occurred.

Formula: Loss = Cost price (C.P.) – Selling Price (S.P.)
  • Profit or Loss is always calculated on the cost price.
  • Marked price: This is the price marked as the selling price on an article, also known as the listed price.
  • Discount or Rebate: This is the reduction in price offered on the marked or listed price.
Below is the list of some basic formulas used in solving questions on profit and loss:
  • Gain % = (Gain / CP) * 100
  • Loss % = (Loss / CP) * 100
  • SP = [(100 + Gain%) / 100] * CP
  • SP = [(100 – Loss %) / 100]*CP
The above two formulas can be stated as,
If an article is sold at a gain of 10%, then SP = 110% of CP.
If an article is sold at a loss of 10%, then SP = 90% of CP.
  • CP = [100 / (100 + Gain%)] * SP
  • CP = [100 / (100 – Loss%)] * SP

Profit and Loss: Solved Examples

Question 1: An article is purchased for Rs. 450 and sold for Rs. 500. Find the gain percent.
Solution:
Gain = SP – CP = 500 – 450 = 50.
Gain% = (50/450)*100 = 100/9 %
Question 2: A man sold a fan for Rs. 465. Find the cost price if he incurred a loss of 7%.
Solution:
CP = [100 / (100 – Loss %)] * SP
Therefore, the cost price of the fan = (100/93)*465 = Rs. 500
Question 3: In a transaction, the profit percentage is 80% of the cost. If the cost further increases by 20% but the selling price remains the same, how much is the decrease in profit percentage?
Solution:
Let us assume CP = Rs. 100.
Then Profit = Rs. 80 and selling price = Rs. 180.
The cost increases by 20% → New CP = Rs. 120, SP = Rs. 180.
Profit % = 60/120 * 100 = 50%.
Therefore, Profit decreases by 30%.
Question 4: A man bought some toys at the rate of 10 for Rs. 40 and sold them at 8 for Rs. 35. Find his gain or loss percent.
Solution:
Cost price of 10 toys = Rs. 40 → CP of 1 toy = Rs. 4.
Selling price of 8 toys = Rs. 35 → SP of 1 toy = Rs. 35/8
Therefore, Gain = 35/8 – 4 = 3/8.
Gain percent = (3/8)/4 * 100 = 9.375%
Question 5: The cost price of 10 pens is the same as the selling price of n pens. If there is a loss of 40%, approximately what is the value of n?
Solution:
Let the price of each pen be Re. 1.
Then the cost price of n pens is Rs. n and
the selling price of n pens is Rs. 10.
Loss = n-10.
Loss of 40% → (loss/CP)*100 = 40

Therefore, [(n-10)/n]*100 = 40 → n = 17 (approx)
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