Profit, Loss and Discounts is one of prominent topics that is common across many entrance and competitive exams. It also has wide range of real-world applications from finance to economics. In this blog post, let's explore these concepts in detail along with key formulas and sample questions.
Definitions:
- Selling Price: The price at which the goods is sold.
- Cost Price: The price at which the goods can be produced or purchased.
- Marked Price/List Price: It is the price labelled on goods. You can consider MRP as an example of marked price.
- Discount: Discount is a reduction in the price of a good. It will be expressed as a number or percentage.
- Successive Discount: Successive discount is a type of discount when the seller offers discount on an already discounted goods.
- Profit: A transaction in which cost price is less than the selling price. It is the difference between Selling Price - Cost Price. It is generally expressed as number or %.
- Loss: A transaction in which selling price is less than the cost price. It is the difference between Cost Price - Selling Price. It is generally expressed as number or %.
Relationship & Formula:
- Selling Price= Marked Price -Discount
- When D1 and D2 are two successive discounts,
- Selling Price= (Marked Price * (100 - D1) * (100-D2))/(100*100)
- Profit = Selling Price - Cost Price
- Loss = Cost Price - Selling Price.
- % Profit = (Profit/Cost Price) * 100
- % Loss = (Loss/Cost Price) * 100
Examples:
1) Cost price of an article is 100. The Selling Price is 120. Find the profit & profit percentage.
Profit=120-100=20
Profit % =20/100 = 20%
2) Cost price of an article is 100. The Marked Price is 120. Discount is 10. Find the profit & profit percentage.
Selling Price = 120-10=110
Profit=110-100=10
Profit %=10/100=10%
3)Cost price of an article is 100. The Selling Price is 80. Find the profit or loss & profit or loss percentage.
Since selling price is less than cost price, the transaction is a loss transaction.
Loss=100-80=20
Loss % =20/100=20%
4)Marked price of an item is 100. The sellers offers two successive discount of 10%. Find the selling price.
Selling Price= (Marked Price * (100 - D1) * (100-D2))/(100*100)
where D1=10,D2=10
Selling Price=(100 * (100-10) * (100-10))/(100*100)
Selling Price=(100 * 90 * 90)/(100 * 100)
Selling Price=81
Click Here to test your knowledge on Profit & Loss.
Instructions:
- Choose Profit & Loss from 'Select test Topic' drop down.
- Each correct selection results in 1 mark.
- Each in-correct selection results in -0.33 mark.
- All the Best