Profit and Loss

Profit and Loss

The terms Profit and Loss are used in businesses. In business transactions, goods are purchased and sold. The price used to purchase is called “Cost Price” and written as CP. The price obtained by selling goods is called “Selling Price” and it is written as SP.


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If the selling price of certain item is more than the cost price, then there is a profit. If the cost price of certain item is more than its selling price, then there is a loss. For example:


-    An article is bought for Rs. 500 and sold it for Rs. 600. Here, SP is more than CP, so there is a profit of Rs. 600 – 500 = Rs. 100


-    An article is bought for Rs. 1000 and sold for Rs. 800. Here, CP is more than SP, so there is a loss of Rs. 1000 – 800 = Rs. 200


As stated in the examples above,


If SP>CP, there is a profit and it is obtained as


Profit (P) = SP – CP



If CP>SP, there is loss and it is obtained as


Loss (L) = CP – SP

Profit and loss percent is calculated on the basis of cost price (CP). So,


Profit percent (P%) = Profit/CP × 100%.  Loss percent (L%) = Loss/CP × 100%


The formula of CP, SP, Profit, and Loss:


1. Profit = SP – CP  	2. Loss = CP – SP  	3. SP = CP + Profit 	4. CP = SP – Profit 	5. SP = CP – Loss 	6. CP = SP + Loss 	7. Profit percent (P%) = Profit/CP × 100% 	8. Loss percent (L%) = Loss/CP × 100% 	    9. CP = 100/(100 + P%) × SP 	10. CP = 100/(100 - L%) × SP 	11. SP = (100 + P%)/100 × CP 	  12. SP = (100 - L%)/100 × CP


How to solve the problems related to Profit and Loss?


While solving the problems related to profit and loss we must use the following steps:


i.     Understand the problem and make planing.

ii.    Solve problem according to the planing.

iii.  Review solved problem and recheck  it.

iv.  At last, write the conclusion according to the question.

Worked Out Examples


Example 1: Mrs. Sarala bought a Banarasi Sari at Rs 3500. After one month, she was interested to have a new one and hence she sold it for Rs. 3200. Find her loss percent.


Solution: Here,


CP = Rs. 3500, SP = Rs. 3200 ∴  Loss = CP – SP  	= Rs. 3500 – 3200  	= Rs. 300 ∴  Loss percent = Loss/CP × 100% 		  = 300/3500 × 100% 		  = 8.57%


  Her loss percent is 8.57%.



Example 2: Sabin bought 14 copies for Rs. 140 and sold 8 copies for Rs. 96. Find his profit or loss percent.


Solution: Here,


CP of 14 copies = Rs. 140 ∴  CP of 1 copy = Rs. 140/14 = Rs. 10     SP of 8 copies = Rs. 96 ∴  SP of 1 copy = Rs. 96/8 = Rs. 12 ∴  For 1 copy, SP > CP. So there is profit. ∴  Profit = SP – CP  	  = Rs. 12 – 10  	  = Rs. 2 ∴  Profit percent = Profit/CP × 100% 	                = 2/10 × 100% 		     = 20%


He has got a profit of 20%.



Example 3: An exercise book cost Rs. 20. If it is sold at a profit of 10%, find its selling price.


Solution: Here,


CP = Rs. 20,  Profit = 10%,  SP = ? We know, 	SP = (100 + P%)/100 × CP  	     = (100 + 10)/100 × 20 	      = 110/100 × 20 	       = Rs. 22


  The selling price of that exercise book is Rs. 22.

Example 4: If a shopkeeper sells a shirt for Rs. 270 at a loss of 10%, for what price should it be sold, so as to get a gain of 30%?


Solution: Here,


1st Case, 	    SP = Rs. 270,  Loss = 10% 	    ∴  CP = 100/(100 - L%) × CP 		 = 100/(100 - 10) × 270 		 = 100/90 × 270 		 = Rs. 300 2nd Case, 	    CP = Rs. 300,  Profit = 30% 	    ∴  SP = (100 + P%)/100 × CP  	             = (100 + 30)/100 × 300 	             = 130/100  × 300 	             = Rs. 390


The shirt should be sold at Rs 390 to get a profit of 30%.



Example 5: Salman sold a DVD at a gain of 8%. Had it been sold for Rs. 75 more, the gain would have been 14%. Find the cost price of the DVD.


Solution: Here,


Let, CP = Rs. x ∴ SP1 at 8% gain = (100 + P%)/100 × CP 		     = (100 + 8)/100 × x 		     = 108x/100 ∴ SP2 at 14% gain = (100 + 14)/100 × x 		       = 114x/100 According to question, SP2 – SP1 = Rs. 75 i.e. 	114x/100 – 108x/100 = 75  or,	(114x-108x)/100 = 75 or,	6x/100 = 75 or,	6x = 7500 or,	x = 7500/6 or,	x = 1250


Hence, the CP of the DVD is Rs. 1250.



Do you have any questions regarding the Profit and Loss?

You can ask your questions or problems in the comment section below.

2 comments:

  1. A man allows a discount of 10% on a book whose marked price is ₹40. What is the cost price so that the profit is 20% ?

    ReplyDelete
    Replies
    1. Solution: Here,
      MP = ₹40
      Discount = 10%

      SP = (100 – d%)MP/100 = (100 – 10)40/100 = 90×40/100 = ₹36
      Profit = 20%

      CP = 100SP/(100+P%) = 100×36/(100+20) = 3600/120 = ₹30

      ∴ The cost price is ₹30. Ans.

      Delete