MATH

Profit & Loss

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 PROFIT & LOSS

Definition
In earlier years, barter system was a system of exchange
where participants in transaction directly exchange
goods or services for other goods or services i.e. if
person A has chicken but wants to get some apples
meanwhile, person B has a bushel of apples but want
chicken. They both can exchange among themselves
but this situation leads to dissatisfaction in person
A because he thinks that chickens are more costly, he
had taken care of chicken fed them regularly his hardship
is more in comparison to apple production.
This dissatisfaction and uncommon measure of value
leads to monetary system. Within that each person tries
to put a value of everything in monetary terms and takes
that amount in exchange of the item. Now from there we
arrive at the concept of buying and selling products. The
concept of profit and loss comes into picture from that
very day. Let us understand some definitions before
going to the Ex. of the Profit & Loss.

1
Some Important points:
Cost Price (C.P.): The price at which article is purchased
is called its Cost Price. All overhead expenses such as
transportation, taxes etc. are also included in cost price.
Selling Price (S.P.): The price at which article is sold is
called its Selling Price.
Profit (P): The amount gained by selling an article with
more than its cost price (S.P > C.P) is called as profit,
which is denoted by P.
Profit = Selling Price – Cost Price
Ex 1: The cost price of article is Rs.300 and the selling
price of article is Rs.360. Find the amount of profit.
Sol. Given, Cost Price = Rs.300
Selling Price = Rs.360
Since, S.P > C.P
Thus, Profit = S.P – C.P = Rs. 360 – 300= Rs. 60
Loss (L): You incur a loss, when you sell a product at a
price which is lesser than the Cost price
Loss = Cost Price – Selling Price

2
Ex 2: The cost price of article is Rs. 360 and the selling
price of article is Rs.300. Find the amount of loss.
Sol. Given, Cost Price = Rs.360
Selling Price = Rs.300
Since, C.P > S.P
Thus, Loss = C.P – S.P = Rs. 360 – 300= Rs. 60
Profit and Loss Percent:
Suppose that a dealer buys an article for Rs.100 and
sells it for Rs.101, his profit is Rs.1. Another dealer buys
an article for Rs.2 and sells it for Rs.3. His profit is also
Rs.1. What did you think? Which transaction is better?
To compare the two rates of profit we represent them as
a percentage. Thus, the percentage of profit in the first
1 1
case is  100 = 1%, and in second case is  100 = 50%. In
100 2
other words, the rates of profit are 1% and 50%. The latter
is much higher than the former.
 % Profit:
Total Pr ofit
% Profit =  100
Cost Pr ice

3
  % Loss:

%Loss= Total Loss  100

Cost Pr ice

Gain or loss percent is never calculated on the number of

articles sold. For Ex, if a dealer sells 100 articles and
makes a profit of Rs.10, it is impossible to calculate his
gain per cent unless the cost price of the articles can be
10
found. If 100 articles cost Rs.50, he gains  100 , i.e.
50
20%
As, while calculating any percentage change, the
increase or decrease is expressed as a percentage of
first value, buying comes before selling, thus gain or loss
is expressed as a percentage of the buying price (i.e., the
cost price), not of the selling price.
If the gain is given to be 20%, it means that if the cost
price is 100, the selling price is 120.
If the loss is given to be 20%, it means that if the cost
price is 100, the selling price is 80.
So, in both the cases, it is the cost price that is 100, never
the selling price.

4
Ex 3: If Sanjay bought a T.V. for Rs.300 and sold it for
Rs.360, find the profit%.
Sol: Cost Price = Rs.300
Selling Price = Rs.360
Profit = Rs.60

Profit % = 60
 100  20%
300

Or, we can think like this.

On Rs.300, the profit is Rs.60
60
On Rs.100, Profit =  100  20%
300
Ex 4: If Ajay bought a T.V. for Rs.360 and sold it for
Rs.300, find the loss%.
Sol: Cost Price = Rs.360
Selling Price = Rs.300
Loss = Rs.60
60
Loss% =  100  16.67%
360
On Rs.360, the loss is Rs.60
60
On Rs.100, Loss =  100  16.67%
360

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Note: Profit and loss percentage is always calculated on
cost price, unless otherwise specified.
Now, we can understand that two out of the three
quantities related to prices, i.e. C.P, S.P, amount of Profit
or Loss or their percentage, we can find the rest.
Ex 5: The cost of a toy is Rs.120. If the shopkeeper sells
it a loss of 10%, find the price at which it is sold.
Sol: Cost Price = Rs.120
Loss of 10 % means if C.P is Rs.100, Loss is Rs.10
Therefore, S.P would be Rs. (100 – 10) = Rs.90
When C.P is Rs.100, S.P is Rs.90
Therefore, if C.P were Rs.120 then

S.P = 90  120  Rs.108

100

Otherwise,
Loss is 10% of the cost price = 10% of 120 = Rs.12
Therefore, S.P = C.P – Loss = Rs.120 – Rs.12 =
Rs.108

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Ex 6: The selling price of a hair dryer is Rs.540. If the
profit made by shopkeeper is 20%, what is the cost
price of this hair dryer?
Sol: Given, Profit = 20% of C.P
S.P = C.P + Profit
540 = C.P + 20% of C.P

540 = C.P + 1 C.P

5

C.P = Rs.450
Otherwise,
20% profit means if C.P is Rs.100, profit is Rs.20
Therefore, S.P = 100 + 20 = 120
Now, when S.P is Rs.120, then C.P is Rs.100
Therefore, when S.P is Rs.540, then C.P =
100
 540  Rs.450
120

Marked Price: The price on the label of an article/product

is called the Marked Price or List Price. This is the price
at which product is intended to be sold.
Discount: It is a reduction amount made from the list
price or marked price.

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Consider a situation that, you went to a market to buy a
Jacket, the Price tag on the jacket i.e. Marked Price of
Jacket is Rs.2000. So, you negotiated with the owner of
the shop to decrease the cost and he agreed to give you
the same jacket for Rs.200 less i.e. for Rs.1800. Now, in
this situation the amount that was decreased by the
shopkeeper i.e. Rs.200 was discount and after
decreasing the marked price, the amount on which you
bought the Jacket will be the selling price of the
shopkeeper. Thus, Marked Price – Discount = Selling
Price.
So, we can say that Discount = Marked Price – Selling
Price
Discount
Discount % =  100
Marked Pr ice

Ex 7: An item marked at Rs.2000 is sold for Rs.1800.

What is the discount and discount %?
Sol: Discount = Marked Price – Selling Price =
Rs.2000 – Rs.1800 = Rs.200
Since discount is on Marked Price, we will have to
use marked price as the base.
On Marked Price of Rs.2000, the discount is Rs.200

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 On M.P of Rs.100, the discount will be =
200
 100  10%
2000
Ex 8: The list price of a jacket is Rs.2000. A discount of
10% is announced on sales. What is the amount of
discount on it and its sale price?
Sol: Marked Price is same as the list price.
10% discount means that on Rs.100 (M.P), the
discount is Rs.10
By unitary method, on Rs.1 the discount will be
10
Rs.
100
10
On Rs.2000, discount =  2000  Rs.200
100
The sale price = Rs.2000 – Rs.200 = Rs.1800
Otherwise,
A discount of 10% means for a M.P of Rs.100,
discount is Rs.10. Hence, the sale price is Rs.90.
Using unitary method, when M.P is Rs.100, sale
price is Rs.90;
90
When M.P is Rs.1, sale price is Rs.
100

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 Hence, when M.P is Rs.2000, sale price = Rs.
90
 2000  Rs.1800
100

On Rs.2000, discount = 10  2000  Rs.200

100

Successive Discounts: Successive discount is the

discount which is offered on the discount.

Hurry up!!!!
40% + 10%
Off!!!

To understand the concept of successive discount in

detail, consider a situation: While crossing a garment
store on road, you must have come across the posters
saying ‘’Hurry, 40% + 10% off!’’
Now, some of you might think that the total discount is
‘’40 + 10 = 50%’’, which is wrong as this doesn’t refers to
total discount 50% discount, whereas it refers that there
will be discount of 40% on marked price and further 10%
discount will be given on the discounted price. Suppose
you purchased a product whose marked price is Rs.1000
and offer on the product is 40% + 10% means that 40%
discount will be available on Rs.1000 i.e. discount of
Rs.400, further 10% discount will be available on Rs.600

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i.e. discounted amount which will be Rs.60, after that you
purchase the product for Rs.540.
So, the total discount = 1000 – 540 = 460

Discount % = 460  100  46%

1000

Or a straight method can be applied for two discounts.

Single discount, which is equal to two successive
discounts of x % and y% =  x  y 
xy 
%
 100 

So, we can also apply this formula to get resultant i.e. =

 40  10 
 40  10  %  46 %
 100 

Ex 9: The marked price of a jacket is Rs.1000. The

successive discounts offered by the store 20% and
30%. Find the single discount equivalent to the two
discounts given by the shopkeeper.
Sol: Successive discounts offered = 20% & 30%
S.P = 1000 – 20% of 1000 = 800
800 – 30% of 800 = 560
Total discount = 1000 – 560 = 440
440
Discount % =  100  44%
1000

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 Otherwise,
20  30
Total discount = 20  30   44%
100
Ex10: The marked price of jeans is Rs.1000. The
successive discount offered by the store is 30%
and 20%. Find the single discount equivalent to the
two discounts given by the shopkeeper.
Sol: Successive discounts offered = 30% & 20%
S.P = 1000 – 30% of 1000 = 700
700 – 20% of 700 = 560
Total discount = 1000 – 560 = 440
440
Discount % =  100  44%
1000
Otherwise,
30  20
Total discount = 30  20   44%
100
Now, from the above two examples it is clear that
in case of successive discount you can avail any of
the discount on marked price and other on
discounted price the resulting amount will be the
same i.e. either you avail 30% discount on marked
price and then 20% discount on the discounted

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 price or you can avail 20% discount on the marked
price and then 30% discount on the discounted
price resulting in the same total discount. Same
will be applicable in case of 3 successive
discounts.
Dishonest Dealers and Faulty weights:
Is it possible that the shopkeeper sells the items at its
cost price but still, he makes a profit on those items?
The answer is yes, but it is possible only if he gives less
quantity to the customer then the indicated on the
product. A dishonest merchant shows that he is selling
the product on cost price in the welfare of customer but
in that he reduced its weight.
e.g. If a shopkeeper sells a 1 liter of milk at its cost price
but he gives only 800 ml milk. Now, in this case, he is
giving 800 ml milk to a customer but he is charging for
1000 ml to the customer. Hence, we can say that 800 ml
is the cost price and 1000 ml is selling price. So, he is
getting a profit of 200 ml of milk on selling 800 ml of
milk.
200
Profit % =  100  25%
800

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Now, let us consider other example for more clarity.
Suppose a shopkeeper gives 25% less quantity of
product than indicated but he gives 10% discount on
cost price of product to the customer. This means that
shopkeeper still manage to earn profit by giving
customers a discount of 10% on product. This situation
can be considered as dishonest seller or faulty weights
and has importance in profit and loss concepts where
shopkeeper sells the items at cost price but still, he
makes a profit on products by providing less quantity to
the customer than indicated on the product.
To calculate the profit percentage, let us assume
shopkeeper purchased 100 units but while selling he
gives only 75 units and claims that he is giving 100 units
at 10% discount means he has charged the amount for
90 units but he is giving only 75 units to the customer.
So he is getting a profit of 15 units on the sale of 75
units.
90  75
Profit % =  100  20%
75
So, when a tradesman professes to sell at cost price, but
uses a false weight, then the percentage profit earned =
Error
 100
True Weight  Error

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Important Profit & Loss Formulae
Equal % profit & loss on the same selling price of two
articles:
If two items are sold each at Rs X, one at a gain of p %
and the other at a loss of p %, then the two transactions
p2
have resulted in an overall loss of %
100

2  p2  X
The absolute value of the loss = Rs 1002  p 2

Equal % profit & loss on the same cost price of two articles:
If the cost price of two items are X, and one is sold at a
profit of p % and the other at a loss of p %, then the two
transactions have resulted in no gain or no loss.
When the SP of x articles is equal to CP of y articles, what is
the profit percent earned?
100  difference in x and y
Profit percent = .
X

More Solved Examples:

Ex 1: A cloth merchant bought 20 shirts, each at a price
of Rs 180. He paid Rs 100 as octroi charges for
bringing them into Pune. He sold each of them for
Rs 203.50. Find his percentage profit.

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Sol. Total cost = cost of 20 shirts + Rs 100 (Octroi) =
20  180 + 100 = 3700
Cost / Shirt = 3700/20 = 185.
Selling price = 203.50.
 Profit = 203.5 – 185 = 18.50.
 % Profit = 100 × 18.5/185 = 10 %
Ex 2: Raj purchased two watches at the same price and
sold one at a profit of 10 % and the other at a
profit of 12.5%. If the difference between the two
selling price is Rs 15, what is the cost price of
each of the watches?
Sol. Let the cost price of the watches = 100
The selling price of the first watch = 110 and
The selling price of the second watch = 112.5.
If difference in the selling price = 2.5 then the cost
price = 100
If the difference in selling price = 15, the cost
100 
price = 15 = 600
2.5

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Ex 3: A floppy disc drive is sold for Rs 935 at a profit of
10 %. What would have been the actual profit or
loss if it had been sold at Rs 807.50?
Sol. S.P. = Rs 935, Profit% = 10%

Therefore (1.1) C.P = 935.  C.P =

935
= 850
1.1

If selling price = Rs.807.50, then loss = 850 –

807.50 = 42.50
42 .5 
% Loss = 100 = 5 %
850
Ex 4: Profit obtained by selling a wristwatch at Rs 160
th
is equal to 7 of the profit obtained by selling the
5
same wristwatch at Rs 150. What is the cost price
of the watch?

Sol. Let the cost of a watch be x  (160 - x) = 7 × (150 -

5
x) 800 – 5x = 1050 – 7x2x = 250  x = Rs.125
2
Ex 5: If an article is sold at a loss of 66 %, what is the
3
loss in terms of the selling price?
2
Sol. Let the C. P. = 100. Amount loss = 66
3

17
 2
 S. P. = 100 – 66 = 33
1
3 3
2
66
Loss expressed in terms of S. P. = 3 ×100 =
1
33
3
200 %
Ex 6: If toffees are bought at the rate of 7 for a rupee
and sold at the rate of 5 for a rupee, find the gain
percent.
Sol. Suppose there are 35 toffees which are bought at
the rate of 7 for a rupee and sold at the rate of 5
for a rupee (L.C.M of 7 and 5 = 35)

C.P of 35 toffees = Rs. 35  Rs.5

7

S.P of 35 toffees = Rs. 35  Rs. 7

5

As, S.P > C.P, it is a gain and Gain = S.P – C.P =

Rs.2

Therefore, Gain % = 2  100  40%

5

Ex 7: At what price each of the sixty T-Shirts is sold so

that cost of each of which is Rs.25, so as to get a
profit equal to the selling price of 10 of them?

18
Sol. ATQ, S.P. of 10 T-Shirts = S.P of 60 T- Shirts – C.P.
of 60 T-Shirts
10 S.P. = 60 S.P – 60  25
50 S.P = 1500  S.P = Rs. 30
Ex 8: 5/8th of 160 chairs were sold at a profit of Rs. 25
each and the rest for Rs. 8,200. If the seller makes
a profit of 25 % on the whole transaction, what is
the cost price of each of the chairs?
Sol. 5/8th of 160 =100 chairs were sold at a profit of
Rs.25 each.
Profit on these 100 chairs = 2500
Remaining chairs 160 – 100 = 60
S. P. of all 160 chairs
= C. P. of 100 chairs + Profit on 100 chairs + S. P.
of 60 chairs = 100 × C.P + 2500 + 8200
= 100  C. P. +10700
But these 160 chairs were sold at a profit of 25 %.
S. P. = 1.25  C.P
160  1.25  C.P = 100  C. P. + 10700
200 C.P = 100 C.P + 10700  C. P. = 107.

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Ex 9: A man sold two articles for Rs.2970 each, gaining
10% on one and losing 10% on the other. Find his
gain (or) loss per cent on the whole transaction.
Sol. Ist article:
S.P = Rs.2970, Gain % = 10%
Thus, 110% of C.P = 2970  C.P = Rs.2700
IInd article:
S.P = Rs.2970, Loss % = 10%
Thus, 90% of C.P = 2970  C.P = Rs.3300
S.P of both articles = 2 × 2970 = Rs.5940
C.P of both articles = 2700 + 3300 = Rs.6000
Now, C.P > S.P, therefore it is a loss,
Loss = C.P – S.P = 6000 – 5940 = Rs.60

Loss% = 60
 100  1%
6000

Therefore it is a loss of 1% on the whole

transaction.
Ex10: A dealer prices an article at 20% more than the
cost price and allows a discount of 10% on it. Find
the gain percent.

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Sol. Let C.P be Rs.100. Then Marked price = Rs.120;
Discount = 10%
Therefore, S.P = 90% of 120 = Rs.108
Gain = 108 – 100 = Rs.8 which is on Rs.100  Gain
% = 8%
Ex11: A dishonest dealer professes to sell his goods at
cost price but uses a false weight and thus gains
25%. For a kilogram he uses a weight of:
Sol. Let the error is ‘x’ gm, we have
Error
 100  %age profit
True Weight  Error

x
 100  25
1000  x
x 1

1000  x 4
x  200 gm

Hence, the weight used = 1000 – 200 = 800gm

Ex12: A retail fruit vendor buys pineapples at a score for
Rs 175, and retails them at a dozen for Rs 114. Did
he gain or lose in the transaction and what % was
his gain or loss?
Sol: C.P = Rs.175/score

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  C.P/Pineapple = 175 20 = 8.75 (Note: 1 score = 20
nos.)
S.P = Rs.114/dozen  S.P/Pineapple = 114 12 = 9.5

Profit = 0.75.  % Profit = 0.75

8.75
 100 =8 4
7
%

Ex13: A man sells two tables at the same price. On one

he makes a profit of 10 % and on the other he
makes a loss of 10 %. Find his total loss / gain in
these two transactions. If the selling price of the
tables was Rs 1000 each, what was the profit /
loss in Rs and what was the cost price of each of
the tables?
Sol: Net loss = 10 % = 1 % loss
2

100

If the selling price = S.P, the amount of loss =

2  p 2  S. P
100 2  p 2
 As the selling price = 1000,
2  10 2  1000 2000
loss = = 99
= 20 20 99 .
100 2  10 2

Cost price of the item sold on profit

C.P (1 + 0.1) = 1000.
C.P = 1000 1.1 = 909 111

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 Cost price of the item sold on loss
C.P (1 – 0.1) = 1000.
 C.P = 1000 0.9 = 1111.11

Ex14: A merchant buys 20 kgs of rice at Rs 1.50 / kg, and

another 40 kgs of rice at Rs 0.90 / kg. He mixes
them and sells one third of the mixture at Re 1/ kg.
At what price should he sell the remaining mixture
to get an overall profit of 25 %?
Sol: Total cost for the entire quantity of rice = 20  1.5 +
40  0.9 = 66
If his profit is 25 % then the sales realization = 1.25
 66 = 82.50

He sells 20 kgs at Re 1/kg = Rs.20.

Therefore to make the said amount of profit, he
should sell the remaining 40 kgs of rice at (82.50 -
20) = Rs.62.50
 The selling price of a kg of rice for the remaining
40 kgs = 62.5
40
= 1.5625

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Ex15: 2000 copies of a book are printed at Rs 8000. What
should be the list price if the publisher wishes to
make a 50 % profit after giving a 20 % discount on
the list price to the retailer?
Sol: C.P per book = 4
Profit to be made = 50 %  S.P = 1.5  4=6
Rs. 6 should be the net price to the publisher after
a 20 % discount on the list price.
I.e. List price  0.8 = 6  List price = 6
0.8
= Rs. 7.5

Ex16: Arun buys a camera for Rs 6000 and sells it to

Kumar at a profit of 20 %. After some time Kumar
sells it back to Arun at a loss of 10 %. How much
did Arun gain in the whole transaction and what
was the % gain in terms of his original cost?
Sol: Transaction I: S. P. of Arun = C. P. of Kumar = 1.2
 6000 = 7200

Transaction II: S. P. of Kumar = C. P. of Arun = 0.9

 7200 = 6480

Therefore net profit to Arun = S. P. A1 – S. P. K2 =

7200 – 480 = 720  % Profit = 720 6000  100 = 12 %

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Ex17: A package tour operator allows a 25 % discount on
his advertised price and then makes a profit of 20
%. What is the advertised price on which he gains
Rs.60?
Sol: Profit = Net price – Cost Price = 60
Net price = 1.2 (C. P.)  1.2 C.P – C. P. = 60
 0.2 C. P. = 60  C. P. = 300 and Net price = 360.
List price or advertised price  (0.75) = Net price
Net . price 360
 List price = = 0.75
= 480.
0.75
Ex18: One tradesman calculates % profit on the buying
price and the other on the selling price. Find the
difference between their profits if both of them
claim to make 20 % on their goods sold at Rs.1500
Sol: Case I: C. P. (1.2) = 1500.
 C. P. = 1250  Profit = 1500 – 1250 = Rs. 250

Case II: Profit = 0.2 (S.P) = 0.2  1500 = Rs. 300

 The difference in profit made by each of the
tradesmen = Rs. 50.

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Ex19: A man sold Pentium computers at a profit of 6 %.
Had he made a loss of 5 % instead due to a price
crash, he would have sold it for Rs 3,850 less. What
was his cost price and selling price in each of the
instances?
Sol: C.P (1.06) = S.P1
C.P (0.95) = S.P.2
S.P1 – S.P2 = 3850  C.P (1.06 – 0.95) = 3850
 0.11 C. P. = 3850  C. P. = 35,000
And S. P.1 = 1.06  35,000 = 37,100 and S. P.2 =
0.95  35,000 = 33,250

26