Profit and loss

Basic Definitions and Formulas

Cost price (C.P.): This is the price at which an article is purchased.Selling price (S.P.): This is the price at which an article is sold.Profit or Gain: If the selling price is more than the cost price, the difference between them is the profit incurred.

Formula:                               Profit or Gain = S.P. – C.P.

Loss: If the selling price is less than the cost price, the difference between them is the loss incurred.

Formula: Loss = Cost price (C.P.) – Selling Price (S.P.)

Profit or Loss is always calculated on the cost price.Marked price: This is the price marked as the selling price on an article, also known as the listed price.Discount or Rebate: This is the reduction in price offered on the marked or listed price.

Below is the list of some basic formulas used in solving questions on profit and loss:

Gain % = (Gain / CP) * 100.                   Loss % = (Loss / CP) * 100.                     SP = [(100 + Gain%) / 100] * CP.             SP = [(100 – Loss %) / 100]*CP

The above two formulas can be stated as,

If an article is sold at a gain of 10%, then SP = 110% of CP.

If an article is sold at a loss of 10%, then SP = 90% of CP.

CP = [100 / (100 + Gain%)] * SP.             CP = [100 / (100 – Loss%)] * SP

Profit and Loss: Solved Examples

Question 1: An article is purchased for Rs. 450 and sold for Rs. 500. Find the gain percent.

Solution:

Gain = SP – CP = 500 – 450 = 50.

Gain% = (50/450)*100 = 100/9 %