Profit and Loss

QUANTITATIVE APTITUDE

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Profit and Loss

Definition
Cost Price (CP) : It is the price that cost a manufacturer or person for a product or
service.
Selling Price (SP): It is the price at which a product or service is sold to customer.
Profit : Whenever selling price is greater than cost price the difference is
called profit.

Points to Remember

Dishonest Dealings :

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Discount and Marked Price

Definition
Marked Price (MP) : It is the price at which a product or service is listed for selling.
Discount (D) : It is the difference between marked price and selling price.

Discount = MP – SP
Discount Percentage = (D/MP) × 100
Selling Price = (100 – D%) × MP/100

Q. Marked price of a cricket bat is Rs 1000 and it is sold at Rs 800. Find the discount
percentage.

A. Discount = MP – SP = 1000 – 800 = Rs 200

Discount Percentage = (D/MP) × 100 = (200/1000) × 100 = 20%.

Q. Marked price of a product is Rs 240 and 25% of discount is provided on it. Find the selling
price.

Discount = SP × 25% = 240 × (25/100) = Rs 60

Selling price = MP – Discount = 240 – 60 = Rs 180.
Alternate Method:
Selling Price = (100 – D %) × MP/100 = (100 – 25) × 240/100 = Rs 180.

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Successive Discount
If an article is sold at two discounts then it is said that it is sold after two successive discounts.

Testbook Trick

(where, X = 1st discount % and Y = 2nd discount %)

Q. A T-shirt is sold after providing two successive discounts of 20%. If marked price of T-shirt
is Rs 200 then find the selling price.

Solution:
Discount 1 = 200 × 20/100 = Rs 40
Selling price after 1st discount = 200 – 40 = Rs 160
Discount 2 = 160 × 20/100 = Rs 32
Selling price after 2nd discount = 160 – 32 = Rs 128
Alternate Method:
Effective discount = 20 + 20 – (20 × 20)/100 = 36%
Discount = 200 × 36/100 = Rs 72
Selling price = 200 – 72 = Rs 128.

Q. Marked price of pen is Rs 200. After providing 30% discount a shopkeeper gains a profit of
40%. Find CP of pen.
A.

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A. Alternate Approach:

Let CP = x
Then, after 40% profit SP = 1.4x ---- (1)
Let MP = y
Then, after 30% discount SP = 0.7y ---- (2)
Comparing (1) and (2), we get

Dishonest Dealings
In it a person/shopkeeper sells any product at wrong weight and earn profit. This can be done
either by using false weight or by false reading. For example -

1) A shopkeeper claims to sell rice at cost price but uses false weight of 900gm instead of
1000gm.

2) A person sells cloth to the customer but uses false reading and gives 90 meters cloth in-
stead of 100 meters.

Q. Using faulty weights, a dealer gives only 1,650 ml of milk to his customer instead of 2 liter.
Find his profit percentage.
A. True weight = 2 liter = 2,000 ml
Error = 2,000 – 1,650 = 350 ml

Q. A man gains 30% by selling an article for a certain price. If he sells it at double the current
selling price, then what will be the profit percentage?
A. Let, the cost price be Rs. x.
∴ Selling price = Rs. 1.3x
Now, new SP = Rs. 2.6x
∴ Profit % = [(2.6x − x)] × 100 = 160%

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Successive Selling
In it a product is sold for more than one time from one person to another person at some
profit or loss. For example - A sold a pen to B at 10% profit and then B sold the pen to C at 20%
profit.

Testbook Trick
If there are two successive profits or losses at x% and y% respectively, then the resultant profit
or loss% = x + y + xy/100

 For profit, we take x and/or y as +ve value

 For loss, we take x and/or y as –ve value

Q. If A bought an article at Rs.200 and sold it to B at 20% profit. Again B sold the article at
10% profit to C. Find the amount paid by C.

A. Solution:
Price paid by B = 200 + (200/100 × 20) = 200 + 40 = Rs. 240
∴ Price paid by C = 240 + (240/100 × 10) = 240 + 24 = Rs. 264
Alternate Method:
Net profit = 20 + 10 + 20 × 10/100 = 32%

Testbook Trick
 If two objects are sold at same selling price, one at x% profit and other at x% loss, then

 If the cost price of x articles is equal to selling price of y articles, then

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 If ath part of items are sold at x% loss, then for making no profit no loss
Required gain percentage in selling rest items =

Q. A man sold 2 bicycles at same selling price. One at 20% loss and other at 20% profit. Find
overall profit and loss percentage.
A. Solution:
Let selling price be 300x
Then, CP for 1st bicycle = 250x
Then, CP of 2nd bicycle = 375x
Hence, Net CP = 625x and net SP = 600x
∴ Net loss % = (25x/625x) × 100 = 4%
Alternate Method:
We know, If two objects are sold at same selling price, one at x% profit and other at x% loss,
then, Loss % = x2/100
Net loss % = (20)2/100 = 4%

Q. If the cost price of 5 oranges is equal to selling price of 4 oranges, then find profit
percentage?

A. Solution:

Let cost price of an orange is Rs. 4 and selling price of an orange is Rs. 5 (we can assume it as
it satisfies the given condition of the cost price of 5 oranges is equal to selling price of 4
oranges)
Hence, profit percentage = [(5 – 4)/4] × 100 = 25%
Alternate Method:
We know, If the cost price of x articles is equal to selling price of y articles, then
Profit percentage = [(x – y)/y] × 100 = [(5 – 4)/4] × 100 = 25%

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Q. 10 pens costs Rs. 100 each. If half of the pen are sold at 10% loss then find at what price
remaining each pens should be sold for making no loss and no profit.
A.
Solution:
Total cost price of 10 pens = 10 × 100 = Rs. 1000
Selling price of 1 pen = 100 – (100 × 10%) = Rs. 90
Hence, selling price of 5 pens = Rs. 450
Now, selling price of remaining 5 pens = 1000 – 450 = Rs. 550
Hence, selling price of 1 pen = Rs. 110
∴ Profit % = [(110 – 100)/100] = 10%
Alternate Method:
We know, If ath part of items are sold at x% loss, then for making no profit no loss
Required gain percentage in selling rest items = ax/(1 – a)
Hence, gain % = (0.5 × 10)/(1 – 0.5) = 10%.

Sales Tax
During purchasing any product we have to give certain tax to the government. This additional
payment is known as sales tax. Tax is always calculated on selling price of product.

Q. Ram purchased a bicycle for Rs. 5954. He had paid a VAT of 14.5%. Find the list price of
the bicycle.
A. Let the list price be Rs. a.
VAT = 14.5%
So, a × (114.5/100) = 5954
⇒ a = (5954 × 100)/114.5
⇒ a = 5200
∴ The list price of the bicycle was Rs. 5200.

Q. Rajesh bought accessories worth Rs. 150. Out of the amount spent for buying accessories,
Rs. 10 were spent on sales tax due to taxable purchases. If the tax rate was 10%, calculate
the price of the tax free items.

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A. Total Price = 150

Tax paid = Rs. 10
Tax = 10%
Let the taxable purchases = Rs x
10% of x = 10
⇒ 0.1x = 10
∴ x = 100
∴ Tax free items = 150 – 100 - 10 = Rs.40

If A costing Rs x/kg and B costing Rs y/kg are mixed in a ratio and sold at a certain price of
Rs z/kg to gain m%, then the ratio in which A and B are mixed has been described below
taking an example:

Q: Pure ghee costing Rs. 100 per kilogram and vegetable oil costing Rs. 50 per kilogram are
mixed in some ratio and sold at Rs.96 per kilogram so as to gain 20%. In what ratio is ghee
and oil mixed?

A. SP of mixture = Rs. 96
CP of mixture = 96 × (100/120) = Rs. 80
Let the quantity of ghee and oil mixed be x kg and y kg respectively.
According to the question
100x + 50y = (x + y) × 80
⇒ 100x + 50y = 80x + 80y
⇒ 100x - 80x = 80y - 50y
⇒ 20x = 30y
⇒x:y=3:2
∴ Ratio of ghee and oil mixed = 30 : 20 = 3 : 2

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Q. Ramuhalwai starts an offer,” Buy 5 get 3 free sweets”, of the same price. Find the dis-
count percentage of this offer.

A. Let the price of article be ‘x’

Number of articles buy = 5
Total number of articles got = 5 + 3 = 8
M.P. of 8 articles = 8x
S.P of 5 articles = 5x
Discount = M.P. – S.P.
⇒ 8x – 5x
⇒ 3x
Discount % = (Discount / M. P.) × 100
⇒ (3x / 8x) × 100
⇒ 37.5 %.
The required discount percentage is 37.5%.

Q. If a shopkeeper starts an offer ‘Buy 4 Get 1 free’, then what is the net percentage of dis-
count he has given?

A. Let the price of 1 article be x

Total quantity = 4 + 1 = 5
Number of articles buy = 4
Marked price of 5 article = 5x
SP of 4 article = 4x
Discount = M.P – S.P = 5x – 4x = x
Discount % = (Discount / M.P.) × 100 = (x / 5x) × 100 = 20 %
∴ The net percentage of discount is 20%.

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