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PROFIT, LOSS & DISCOUNT FOR GMAT CAT ARPIT

Manufacturer ( i.e. the producer)

Wholesaler (dealer) Retailer (shopkeeper) Customer

Cost Price The cost incurred by the manufacture or the wholesaler or the retailer ( i.e. the person who pass on the goods to another)

Selling price The price at which one person pass on the goods to another . Profit The extra money a person receives by selling a product . Profit = Selling Price (SP) Cost Price (CP) Loss The less amount that a person receives by selling a product. Loss = CP - SP

Important Formulae:
Profit Percentage = (Profit/CP) * 100 Loss Percentage = (Loss/CP) * 100

* Profit or loss is always calculated on the basis of cost price unless otherwise mentioned in the problem

Marked Price The price written on the tag of a product . It may or may not be equal to the SP, depending upon the discount (available or not).

Discount The amount of money which is to be paid less on the marked price (MP). Marked Price = CP + Markup Selling Price = MP Discount In general, CP<SP<MP CP=SP<MP SP<CP<MP at a profit at no profit no loss at a loss

Some Important Concepts: 1.) When two articles are sold at same price but one of them at a profit & another one at a loss & the percentage profit is the same as the percentage loss. In this case there is always a loss.

Loss (%) = (Common gain or loss/ 10)2

2.) When a person recovers the cost price of m articles by selling n articles (n<m), then Profit (%) = (goods left/ goods sold) * 100 = ((m-n)/n)*100

CI/SI/ Instalments: Simple Interest : Fixed rate of interest on principal (initial amount). Principal: Initial amount invested /loaned/borrowed.

Amount = Principal + Interest

Compound Interest : It is the interest on interest calculated on each successive period.

Simple Interest (SI) = (P*R*T)/100

Where,
P= Principal R= Rate of Interest (%) T= Time Period

A = P + (P*R*T)/100 [ for SI only ]

Conversion of Time Period Rate of Interest

Given (R%) Given (t) Required (R%) Required (t)

R% annual

T years

r/2 (%) half- yearly

2t

R% annual

T years

r/4 (%) quarterly

4t

R% annual

T years

r/12 (%) monthly

12t

Compound Interest (CI) = A- P

Amount (A) = P(1+r/100)t

Difference b/w CI & SI for two years:

= P(r/100)2 Difference b/w CI & SI for 3 years: = P(r/100)2 (r/100 + 3)

Population Questions :
P = P0 ( 1 + r/100)n when population increases

P0 is the initial population P = P0 ( 1 - r/100)n when population decreases

Installments: For SI A = [ x + (x + (x*r*1)/100) + (x + (x*r*2)/100) + ..] Where X = value of each installment

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