Last Updated on Nov 11, 2020
Basic Definitions & Formulae
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 market 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
Given S.P. = ₹ 50/ each and profit% as 40%.
Let C.P. be x. Now,
Profit % = (50 – x / x) * 100
40 = (50 – x / x) * 100
4x= 500 – 10x
14x = 500
x = 35.71
Profit = 50 – 35.71
What if the profit of 40% is on selling price instead?
Then, Profit = profit% * S.P
= 0.4* 50
C.P. = S.P. – Profit
= ₹50 – ₹20
Let’s now move on to calculate S.P. and C.P.
Let C.P. be y
Since, profit % = (profit/ Cost price) *100
20 = (10/y) *100
2y = 100
y = ₹ 50
Therefore, S.P. = ₹50 + ₹10
This video lays out the basics of Profit and Loss. Understanding this topic well is necessary to solve questions that are asked in various competitive exams in the Quant section - applicable to CAT, XAT, MAT, SNAP, IIFT, CLAT, AILET, DU LLB, any other entrance exam as well. For more such content, visit our website - examvictor.com
Also, do not forget to share your views in the comment section below.
We hope you liked our video where we have explained the basic concepts of Profit and Loss. For related videos please click here.