6/28/23, 2:27 PM Profit and Loss (Definition, Formulas & Questions)

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Profit and Loss - Sub Topics

Definition of Profit and Loss
Basic Concepts of Profit and Loss
Important Formulas

Profit
If the selling price of an article is more than its cost price, then the dealer (or
shopkeeper) makes a profit (or gain).

profit

Loss
If the selling price of an article is less than its cost price, the dealer suffers a loss.

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6/28/23, 2:27 PM Profit and Loss (Definition, Formulas & Questions)

Some Basic Concepts of Profit

and Loss
Selling Price (SP) – The price at which the shopkeeper sells the goods is called the
selling price (SP) of the goods sold by the shopkeeper to the customer.

Cost Price (CP) - The money paid by the shopkeeper to the manufacturer or whole-seller
to buy goods is called the cost price (CP) of the goods purchased by the shopkeeper.

Marked Price (MP) - Marked price is the price set up by the seller on the article.

Discount: A discount is a reduction in the price of a product that is offered to a

customer.

Some Important Formulas

Here are some of the important formulas used in calculating the profit and loss
percentage. It is used to express the profit or loss incurred in % form.

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6/28/23, 2:27 PM Profit and Loss (Definition, Formulas & Questions)

Worksheet of Profit and Loss

Solved Questions on Profit and Loss

1. Ronald sold a smartwatch for $376 at a loss of 6%. Find the cost price of the
smartwatch.

a) $400
b) $350
c) $300
d) $250

Answer: a) $400

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6/28/23, 2:27 PM Profit and Loss (Definition, Formulas & Questions)

Explanation: Cost price = Selling price x 100/(100 - loss%)

= $376 × 100/(100-6)
= $376 × 100/94 = $400

2. A boy buys 9 apples for $9.60 and sells them at 11 for $12. find his gain or loss
percent.

a) 2%
b) 2.75%
c) 2.83%
d) 3%

Answer: c) 2.83% 

Explanation: CP of 9 apples = $9.60

CP of 1 apple = $9.60/9 = 1.06
SP of 11 apples = $12
SP of 1 apple = 12/11 = 1.09

Clearly,
SP of 1 apple > CP of 1 apple
We get profit on selling apples = SP - CP = 0.03
Gain% = (0.03/1.06) x 100
= 2.83%

3. A dealer buys furniture for $225 and spends $15 on its repairs. If he sells the same for
$300, find his profit percentage.

a) 10%
b) 15%
c) 20%
d) 25%

Answer: d) 25%

Explanation: A dealer buys furniture for $225

Money spent on repairing the furniture = $15
Total expenses = $(225 + 15) = $240

Here, we consider total expenses as CP.

CP = $240

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6/28/23, 2:27 PM Profit and Loss (Definition, Formulas & Questions)

SP = $300
Profit = SP – CP = $(300 - 240) = $60

Profit% = (60/240) x 100

= 25%

4. Profit after selling a commodity for $425 is same as loss after selling it for $355. The
cost of the commodity is:

a) $385
b) $390
c) $395
d) $400

Answer: b)  $390

Explanation: Let CP = $x
Profit on $425 = Loss on $355
SP – CP = CP – SP
425 – x = x – 355
2x= 780
x = $390

5. A merchant marks his goods up by 75% above his cost price. What is the maximum
discount% that he can offer so that he ends up selling at no profit or no loss?

a) 42.85%
b) 40.04%
c) 39.82%
d) 33.45%

Answer: a) 42.85% 

Explanation: Let us assume that the cost price of the article = $100
Therefore, the merchant would have marked it as $100 + 75% of $100 = 100 + 75 = 175.

Now, if he sells it at no profit or no loss, he sells it at the cost price.

Discount = 175 – 100 = 75
i.e., he offers a discount of $75 on his selling price of $175

Therefore, his discount% = (75/175) x 100 = 42.85%

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6/28/23, 2:27 PM Profit and Loss (Definition, Formulas & Questions)

Practice Questions on Profit and Loss

1. Annie purchased a building set for $10000 and paid $500 for the transportation of
furniture. After 2 years, she sells the same building set for $10150, and finds her profit
or loss percentage.

a) 25%
b) 33%
c) 23%
d) 22%

Answer: b) 33%

2. Sam bought a gold chain from a shop. If he sells it at $8400 to Max and earns a profit
of 12%, find the price at which Sam bought the gold chain.

a) $7100
b) $7250
c) $7350
d) $7500

Answer: d)  $7500

3. A shopkeeper sold a sculpture for $2500. If the cost price of the sculpture is $2000,
find the profit percent.

a) 23%
b) 25%
c) 27%
d) 29%

Answer: b) 25%

4. A shopkeeper purchases a silver table and sells it for $4200. If he incurs a loss of
20%, find the cost price of the silver table.

a) $5250
b) $5150
c) $5052
d) $5200

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Answer: a)  $5250

5. If the cost price of 120 dragon fruits is equal to the selling price of 100 dragon fruits,
what is the profit percent in this transaction?

a) 15%
b) 17%
c) 20%
d) 22%

Answer: c) 20%

6. The owner of the cell phone shop charges 23% more than the cost price. If a
customer paid $7011 for a cell phone, find the cost price of the cell phone.

a) $3200
b) $4300
c) $4900
d) $5700

Answer: d) $5700

7. The marked price of a ceiling platinum plated fan is $1250 and the shopkeeper allows
a discount of 6% on it. Find the selling price of the fan.

a) $1175
b) $1125
c) $1224
d) $1899

Answer: a) $1175

8. A shopkeeper purchases a watch for $3200 and sells it at 15% profit. What is the
selling price of the watch?

a) $3600
b) $3680
c) $3720
d) $3800

Answer: b) $3680

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9. Ronald buys a geyser for $3680 and sells it at a gain of 71/2%. For how much does he
sell it?

a) $2989
b) $3674
c) $3956
d) $4122

Answer: c) $3956 

10. A pen is purchased for 20 cents and is sold for 26 cents. What is the percentage
profit earned?

a) 10%
b) 20%
c) 30%
d) 40%

Answer: c) 30%

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