Learn to calculate profit and loss in transactions

Hyderabad: This new series of articles will focus on profit and loss topic. Here is the introduction to the topic along with practice questions and solutions that will help you in your preparation for the State government recruitment tests. Profit and Loss In our day-to-day life we sell and purchase the things as per our […]

Hyderabad: This new series of articles will focus on profit and loss topic. Here is the introduction to the topic along with practice questions and solutions that will help you in your preparation for the State government recruitment tests.

Profit and Loss

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In our day-to-day life we sell and purchase the things as per our requirement.

A customer can get things in the following manner.

Manufacturer (or producer)

Whole-seller (dealer)

(Shop keeper) Retailer (Sales person)

Customer

Formulae:

1. Profit = SP – CP
2. Profit Percentage = Profit / Cost Price × 100%
3. Loss = CP – SP
4. Loss percentage = Loss / Cost Price × 100%
5. SP = {(100 gain% / 100) × CP} = {(100 – loss% / 100) × CP}
6. If a shopkeeper sells his goods at a% loss on cost but uses b g instead c g, then his percentage profit or loss is {(100 – a)c/b – 100}% as sign positive or negative.
7. If a dealer sells his goods at a% profit or loss on cost price and uses b% less weight, then his percentage profit or loss will be {(b – a)/100-b × 100%} according to positive and negative signs.
8. If a dishonest trader professes to sell his items at CP but uses false weight, then
Gain% = (Error / True value – Error) × 100%
Gain% = (True weight – False weight/ False weight) × 100%
9. When two articles are sold at the same price but one of them at a profit and another at a loss and 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

Examples

1. If the cost price is 95% of the selling price, what is the profit percent?

a) 5.26% b) 6.75% c) 7.2% d) 8.5%

Ans: a

Solution: If the cost price be x, then
SP = 100/95x = Rs 20/19 × 100
 Gain = 20x/19 = Rs x/19 – 20
 Gain percent = (x/19) / x × 100
= 5.26%

2. On selling an article for 651, there is a loss of 7%. The cost price of that article is?

a) 675 b) 700 c) 725 d) 750

Ans: b

Solution: Let the CP of article be ‘x’
Q (100 – 7)% x = 651
 x = 651/93 × 100 = Rs 700

3. In terms of percentage profit which is the best transaction?

CP (in ) Profit (In )

(I) 36 17

(II) 50 24

(III) 40 19

(IV) 60 29

a) I b) II c) III d) IV

Ans: d

Solution: Case I : Percentage Profit
(17 × 100) / 36 = 47%
Case II : Percentage Profit
(24 × 100) / 50 = 48%
Case III : Percentage Profit
(19 × 100) / 40 = 47.5%
Case IV : Percentage Profit
(29 × 100) / 60 = 48.3%
Obviously, (d) is the best transaction.

To be continued…