Last Updated on Nov 11, 2019
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
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