Profit Loss and Interest Questions for CAT

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 Questions
Instructions
For the following questions answer them individually

Question 1

A man borrows Rs 4000 at 15% compound interest. At the end of each year he pays back Rs 1500. How much amount is required to
pay at the end of third year to clear all his dues :

A Rs.775.75

B Rs.973.85

C Rs.1500

D Rs.874.75

Answer: D

Explanation:
15 3
Time value of money Rs 4,000 at the end of 3 years = 4,000 (1 + 100 ) = Rs 6083.5
15 2
Value of first installment at the end of 3 years = 1500 (1 + 100 ) = Rs 1983.75
15
Value of second installment at the end of 3 years = 1500 (1 + 100 ) = Rs 1725

Value of third installment = 1500

Let us assume he has to pay Rs. x to clear all his dues

1983.75 + 1725 + 1500 + x = 6083.5

x = Rs 874.75

Answer is option D.

Question 2

If the cost price is 80% of the selling price, then what is the profit in percentage?

A 20%

B 25%

C 16%

D 22.5%

Answer: B

Explanation:
Given, cost price is 80% of selling price

C.P = 0.8 S.P

S.P − C.P
Profit = C.P × 100
S.P − 0.8S.P
= 0.8S.P × 100
0.2
= 0.8 × 100
= 25%

Answer is option B

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Question 3

If the cost price of 20 articles is equal to the selling price of 25 articles, then the
percentage profit or loss made is_______.

A 20% profit

B 25% loss

C 25% profit

D 20% loss

Answer: D

Explanation:
Let the cost price of one article be C.P and selling price of one article be S.P

It is given that,

20C.P = 25S.P
5
4 S.P−S.P
C.P−S.P 5
Loss% = C.P × 100 = 4 S.P × 100 = 20%
Answer is option D.

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Question 4

Shankar Fertilizer Limited and Shah Fertilizer Limited purchased one packet of Phosphorus each at the same price. Later on GreenP
Company purchased both the packets at equal price from Shankar Fertilizer Limited and Shah Fertilizer Limited. But the profit
percentage of Shankar Fertilizer Limited was X while that of Shah Fertilizer Limited was Y . Shah Fertilizer Limited calculated his
9
profit on the selling price. Thus Y = 45 20 %. If the GreenP 20 Company sells one of the packets to Mehrauli Nursery at X% profit,
then what is the cost price for Mehrauli Nursery. while GreenP Company purchased each of the Phosphorus packets at Rs. 330?

A 726

B 762

C 526

D 584

Answer: A

Explanation:
P
Shankar's profit% = C.P × 100 = X
P
Shah's profit% = S.P × 100 = Y
S.P X
C.P = Y
It is given,
909
Y = 2000 X
X 2000
Y = 909
S.P 2000
C.P = 909
P 1091
C.P = 909
It is given,
C.P = Rs 330
1091
Profit P = 909 × 330 ≈ 396
The cost price for Mehrauli Nursery = 396 + 330 = Rs 726

Answer is option A.

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Question 5

Same item is sold for Rs. 600 and Rs. 175, respectively. The profit earned on the first sale is 20times the loss incurred on the second
sale. To make an overall profit of 30% in the whole transaction, atwhat price the second sale should happen:

A Rs. 310 approx

B Rs. 238 approx

C Rs. 254 approx

D Rs. 357 approx

Answer: C

Explanation:
Let the CP be x

Now as per question, 600 − x = 20 (x − 175)

21x = 4100

x= 195.24

Therefore, to make a profit of 30% selling price of second article should be = 1.3 × 195.24 = 253.81

Question 6

If a principal P amounts to A in two years when compounded half yearly with r% interest. The same principal P amounts to A in two
years when compounded annually with R% interest, then which of the following relationship is true?

A r>R

B r=R

C r<R

D r≤R
Answer: C

Explanation:
Since in first case we are compounding half-yearly and in second case we are compounding yearly and the amount received and the
principal invested in both the cases is same so interest rate in the first case is lower than the interest rate in the second case.

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Question 7

Bank A offers 6% interest rate per annum compounded half-yearly. Bank B and Bank C offer simple interest but the annual interest
rate offered by Bank C is twice that of Bank B. Raju invests a certain amount in Bank B for a certain period and Rupa invests ₹
10,000 in Bank C for twice that period. The interest that would accrue to Raju during that period is equal to the interest that would
have accrued had he invested the same amount in Bank A for one year. The interest accrued, in INR, to Rupa is

A 3436

B 2436

C 2346

D 1436

Answer: B

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  Video Solution

Explanation:
Bank A: 6% p.a. 1/2 yearly (CI)

Bank B: x% p.a (SI)

Bank C: 2x% p.a (SI)

Let Raju invest Rs P in bank B for t years. Hence, Rupa invests Rs 10,000 in bank C for 2t years.

Now,
x 3 2
P ( 100 ) t = P (1 + 100 ) −P
x
( 100 ) t = 1.0609 − 1
x
( 100 ) t = 0.0609
We need to calculate
2x x
SI = 10000 × 2t × ( 100 ) = 40000 ( 100 ) t = 40000 × 0.0609 = 2436

Question 8

Anil, Bobby, and Chintu jointly invest in a business and agree to share the overall profit in proportion to their investments. Anil’s
share of investment is 70%. His share of profit decreases by ₹ 420 if the overall profit goes down from 18% to 15%. Chintu’s share of
profit increases by ₹ 80 if the overall profit goes up from 15% to 17%. The amount, in INR, invested by Bobby is

A 2000

B 2400

C 2200

D 1800

Answer: A

 Video Solution

Explanation:
Let the amount invested by Anil Bobby and Chintu be x, y, and z.

Considering x+y+z = 100*p.

Given Anil's share was 70 percent = 70*p.

As per the information provided :

His share of profit decreases by ₹ 420 if the overall profit goes down from 18% to 15%.

Since the profits are distributed in the ratio of their investments :

With a 3% decrease in the profits the value of profit earned by A decreased by Rs 420 which was 70 percent of the total invested.
10
Hence for all three of them would be combinedly losing (420) ⋅ ( 7 ) = 600

Hence 3 percent profit was equivalent to Rs 600.

The initial investment is equivalent to Rs 20000.

This is the total amount invested.

Chintu's profit share increased by Rs 80 when the profit percentage increased by 2 %. A 2 percent increase in profit is equivalent to Rs
20000*2/100 = Rs 400.

Of which Rs 80 is earned by Chintu which is 20% of the total Rs 400.

Hence he invested 20% of the total amount.

Bobby invested the other 10 percent.

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10 percent of Rs 20000 = Rs 2000

Question 9

The ratio of simple interest calculated biennially and quarterly at the same rate ofinterest for the same time period is _____.

A 1:4

B 2:1

C 1:2

D 4:1

Answer: C

Explanation:
Simple Interest biennially = (1/2)*(P*r*2T)/100 = PrT/100

Simple Interest quarterly = (8)*(P*r*T/4)/100 = 2PrT/100

So, Ratio = 1:2

Question 10

The least number of complete years in which a sum of money will be more thandoubled at 10% compound interest is ________.

A 10

B 8

C 5

D 6

Answer: B

Explanation:
No. of years in which a sum of money invested at r% compounded annually amounts to double is 72/r years

So, no. of years in which the amount will be doubled = 72/10 = 7.2 years

So, the least no. of years for which the amount will be more than doubled will be 8 years.

Question 11

An article when sold for 960 fetches 20% profit.What would be the percent profit /loss if such 5 article are sold for Rs. 825/-each?

A 3.125 % profit

B 3.125 % loss

C Neither profit nor loss

D 16.5 % profit

E None of these

Answer: A

Explanation:
Let cost price of an article = Rs. 100x

If Selling price = Rs 960

960−100x
=> Profit % = 100x × 100 = 20

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=> 960 − 100x = 20x

=> 20x + 100x = 120x = 960

960
=> x = 120 = 8

Thus, cost price of 1 article = 100 × 8 = Rs. 800

If selling price = Rs. 825

825−800
∴ Profit % = 800 × 100
25
= 8 = 3.125%

=> Ans - (A)

Question 12

An item was bought at Rs. X and sold at Rs. Y, there by earning a profit of 20%. Had the value of X been 15% less and the value of Y
been Rs. 76 less, a profit of 30% would have been earned. What was the value of ‘X’

A Rs. 640

B Rs.400

C Rs.600

D Rs.800

E Rs.840

Answer: D

Explanation:
C.P. = Rs.x

S.P. = Rs.y
y−x
Profit % = x × 100 = 20
y−x 20 1
=> x = 100 = 5

=> 5y − 5x = x => 6x = 5y
6x
=> y = 5 -----------(i)

If, value of X been 15% less and the value of Y been Rs. 76 less
85 17x
=> x′ = 100 × x = 20

=> y′ = y − 76
y′−x′
Profit % = x′ × 100 = 30
17x
(y−76)−( 20 )
17x 30 3
=> 20 = 100 = 10

17x 17x
=> 10 × [(y − 76) − ( 20 ] = 3 × 20
170x 51x
=> 10y − 760 − 20 = 20
221x
=> 10y − 20 = 760

Using, equaiton (i), we get :

6x 221x
=> (10 × 5 ) − 20 = 760
221x
=> 12x − 20 = 760
19x
=> 20 = 760
20
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 20
=> x = 760 × 19

=> x = 40 × 20 = Rs.800

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Question 13

Shri Ramlal purchased a TV set for Rs. 12,500 and spent Rs. 300 on transportation and Rs. 800 on installation. At what price should
he sell it so as to earn an overall profit of 15% ?

A Rs. 14,560

B Rs. 14,375

C Rs. 15,460

D Rs. 15,375

E None of these

Answer: E

Explanation:
Cost price of TV = Rs. 12,500

Amount spent on transportation = Rs. 300 and installation = Rs. 800

Net spent = Rs. (12500 + 300 + 800) = Rs. 13,600

Let selling price = Rs.x

x−13600
Profit % = 13600 × 100 = 15
=> x − 13600 = 15 × 136

=> x = 2040 + 13600

=> x = Rs. 15, 640

=> Ans - (E)

Question 14

A trader sells an item to a retailer at 20% discount, but charges 10% on the discounted price, for delivery and packaging. The retailer
sells it for Rs. 2046 more, thereby earning a profit of 25%. At what price had the trader marked the item?

A Rs. 9400

B Rs. 9000

C Rs. 8000

D Rs. 12000

E Rs. 9300

Answer: E

Explanation:
Let Marked price of item = Rs.100x
80 110
=> Selling price of trader = Cost price of retailer = 100x × 100 × 100

= Rs.88x

Selling price of retailer = Rs.(88x + 2046)

(88x+2046)−88x
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 (88x+2046)−88x
Profit % = 88x × 100 = 25
2046 25 1
=> 88x = 100 = 4
2046×4
=> x = 88 = 93
∴ Marked price = 100 × 93 = Rs.9, 300
Question 15

A starts a business with Rs. 2500. After one month from the start of the business, B joined with Rs. 4500 and A withdrew completely
after eleven months from the start of the business. If the difference between A’s and B’s respective shares in the annual profit was
Rs. 4800, what was the annual profit earned?

A Rs. 14800

B Rs. 16800

C Rs. 14400

D Rs. 11400

E Rs. 15600

Answer: B

Explanation:
Amount invested by A = Rs. 2500 and by B = Rs. 4500

Both invested for 11 months.

Ratio of profit shared by A and B

= (2500 × 11) : (4500 × 11)

=5 : 9

Let total profit earned by A and B respectively = Rs.5x and Rs.9x

=> 9x − 5x = 4800
4800
=> x = 4 = 1200
∴ Total profit = 9x + 5x = 14x
= 14 × 1200 = Rs.16, 800

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