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PROFIT AND LOSS

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Profit and Loss Concept SSC CGL Tier-2 Free e-book

Profit and Loss Concept for SSC CGL Tier-2

Profit and Loss concept is an important concept in Mathematics that is used to determine the price of a given
commodity in the market and also to determine if the business is making profit or loss. Each product will have a
certain cost price and selling price. Based on the cost price and selling price the profit or loss on that product can be
calculated.

Suppose for a product a person obtains a selling price which is more than the cost price of that product, then we can
say that the person has made profit. While for the same case, if the selling price is less than the cost price of that
product, it is regarded as a loss.

Profit and Loss is an important topic from which questions are asked in most of the competitive exams like SSC
CGL, SSC CHSL, IBPS PO, SBI PO, SBI Clerk etc.

In this e-book we will be learning about the concept of Profit and Loss and also solve some questions related to
Profit and Loss.

Profit and Loss – Important Terms

Profit: Profit is defined as any amount that is gained by selling a product above its cost price.

Loss: Loss is defined as any amount that is lost by selling a product below its cost price.

Cost Price: The price at which the product or a commodity is purchased. It is also denoted as CP. There are two
kinds of cost.

a. Fixed Cost: The cost which is fixed or in other words cost that doesn’t change in any condition.
b. Variable Cost: The cost which can vary based on the number of units involved.

Selling Price: Selling price is the price at which the product is sold. It is denoted by SP.

Marked Price: Marked price is the price that is marked or labelled on the product. The selling price is usually lower
in such cases as some discount is offered.

Discount = Marked Price – Selling Price

Discount Percentage = (Discount/Marked price) x 100

Formula for Profit and Loss

Profit = Selling Price – Cost Price

Or Gain = Selling Price – Cost Price

Loss = Cost Price – Selling Price or CP-SP

Profit and Loss Percentage

Profit percentage = (Profit /Cost Price) x 100

Loss percentage = (Loss / Cost price) x 100

Selling Price (SP) = {(100 + P%)/100} x CP

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Profit and Loss Concept SSC CGL Tier-2 Free e-book

Selling Price (SP) = {(100 – L%)/100} x CP

Cost Price (CP) = {100/(100 + P%)} x SP

Cost Price (CP) = {100/(100 – L%)} x SP

In case a product is sold at m% profit and then again sold at n% profit then the actual cost price of the product will
be: CP = [100 x 100 x P/(100+m)(100+n)]. In case of loss, CP = [100 x 100 x P/(100-m)(100-n)]

Solved Questions
Q-1. The cost price of an article is Rs. 480. If it is to be sold at a profit of 6.25 percent, how much would be
its selling price?

A. Rs. 519
B. Rs. 510
C. Rs. 530
D. Rs. 503

Solution: B. Rs.510

Here,

CP = 480

Profit Percentage = 6.25%

Now, Selling Price can be calculated using the formula

Selling Price (SP) = {(100 + P%)/100} x CP

SP = {(100+6.25) / 100} x 480

= (106.25/100) x 480

= 1.0625 x 480

= 510

Q.2 After allowing 20% and 15% successive discounts, the selling price of an article becomes Rs. 3,400;
then the marked price will be

A. Rs. 4,800

B. Rs. 4,400

C. Rs. 5,000

D. Rs. 4,500

Solution: C. Rs. 5,000

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Profit and Loss Concept SSC CGL Tier-2 Free e-book

Let M.P. = 100x

On allowing 20% discount = 20x

Price = 100x- 20x

= 80x

Second discount allowed is of 15%

15/100 × 80x

= 12x

Price after second discount = 80x -12x

= 68x

Now,

68x = 3400

x = 3400/68
= 50

Therefore, marked price = 100×50

= 5000

Q-3. A vendor buys pens at the rate of 4 for Rs 5 and sells at the rate of 4 for Rs 6. What will be the result?

A. 40% gain

B. 20% loss

C. 20% gain

D. 40% loss

Solution: C. 20% gain

Here,

CP of 1 Pen = Rs.5/4
= Rs.1.25

Now SP of 1 Pen = Rs. 6/4

= Rs. 1.50

As the selling price is more than the cost price, the vendor makes a profit and the profit percentage can be
calculated as follows

Here Profit = SP – CP
= 1.50 – 1.25
= 0.25

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Profit and Loss Concept SSC CGL Tier-2 Free e-book

Profit percentage = (Profit /Cost Price) x 100

= (0.25/1.25) x 100
= 0.2 x 100
= 20%

Q.4- An article is sold a profit of 20%. If the selling price is doubled, the profit will be:

A. 100%

B. 150%

C. 200%

D. 140%

Solution: D. 140%

Here,

Let CP = 100

Profit = 20%

SP = 100 + 20/100 × 100

= 100 + 20
= 120

If selling price is doubled

Then SP = 2×120
= 240

Profit = 240-100
= 140

Profit % = (Profit /Cost Price) x 100

= (140/100) x 100
= 1.4 x 100
= 140%

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Profit and Loss Concept SSC CGL Tier-2 Free e-book

Q.5 – If a pen cost Rs.70 after 20% discount, then what is the actual price or marked price of the pen?

A. 84

B. 87.5

C. 95

D. 85

Solution: B. 87.5

Here,

SP = 70

Discount = 20%

MP x (100 – 20) /100 = 70

MP x 80/100 = 70

MP = 70×100/80

MP = 87.5

Conclusion

We hope that this e-book will help candidates in understanding the Profit and Loss Concept and prepare well for the
competitive exams. Stay connected to Oliveboard for more such updates.

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