is a shopkeeper. He buys goods from the wholesaler and sells them in his shop
at a higher price to earn profit. When he succeeds in selling at higher price,
he makes profit else he suffers loss.
understand the concept with following example:
John buys sugar at rupees 50 per kg and sells at rupees 55 per kg, he makes
profit of rupees (55 – 50 = 5) per kg. But due to some reason if he has to sell
the sugar at rupees 48 per kg, he will make loss of (50 – 48 = 2) per kg.
From the above example we understand
The price at which John buys sugar is the
Cost Price. Therefore, cost price is the price at which an item is purchased.
The price at which John sells sugar is the
Selling Price. Therefore, selling price is the price at which an item is sold.
When S.P > C.P, he makes profit or gain,
i.e. Profit or Gain = S.P – C.P
When S.P < C.P, he suffer loss, i.e.
Loss = C.P – S.P
Charges such as transportation cost, labor
cost, salary or wages paid, installation charge etc. are called expenses and
these has to be added to the C.P to get actual profit.
Profit% = Profit/C.P X 100
Loss% = Loss/C.P X 100
Example: Tia’s boutique received rupees 5,000 from
one client on Wednesday, but expenses came to rupees 2700. Here income is more than
the expense. So, she earned profit of (5000-3700) = rupees 1300.
Thursday Tia received rupees 7,000 from other client and expenses came to
rupees 7,700. Here income is less than the expense. So, she suffered the loss
of (7,700-7,000) = rupees 700.
Some more examples
Example 1: Dia bought rice bag rupees 500 per
bag. Due to spoilage, she had to sold them for rupees 450 per bag. Find the
gain or loss%.
Here, C.P = Rupees 500 per bag
S.P = Rupees 450 per bag
As S.P < C.P, Therefore Dia
suffer a loss.
Loss = C.P – S.P = 500 – 450 =
Rupees 50 per bag
Loss% = Loss/C.P X 100 = 50/150 X
100 = 33.33%
Example 2: Mr Ravi bought a washing machine for
rupees 15,000 and sold it for rupees 17,000. Find his profit or loss percent.
Here, C.P = Rupees 15,000
S.P = Rupees 17,000
As S.P > C.P, therefore Ravi
made a profit.
Profit = S.P – C.P = 17,000 –
15,000 = Rupees 2000
Profit % = Profit/C.P X 100 = 2,000/15,000
X 100 = 13.33%
Example 3: Reena sold a carpet for rupees 10,000
at a profit rupees 2,000. Find the price at which she bought it.
Here, S.P = 10,000
Profit = 2,000
C.P = S.P - Profit
= 10,000 – 2,000
= Rupees 8,000
Example 4: Ravi has a Alto car worth rupees
2,50,000 and he wants to sell it at profit of rupees 50,000. What should car
selling price be?
Here, C.P = 2,50,000
Profit = 50,000
S.P = C.P + Profit
= 2,50,000 + 50,000
= Rupees 3,00,000
Example 5: Sonu bought a laptop of rupees
1,50,000 at a loss of rupees 10,000. Find selling price of the laptop.
Here, C.P = 1,50,000
Loss = 10,000
S.P = C.P - loss
= 1,50,000 - 10,000
= Rupees 1,40,000
Example 6: Nimmi sold her television for rupees
30,000 at a loss of rupees 5,000.Find the cost price of the television.
Here, S.P = 30,000
Loss = 5,000
C.P = S.P + loss
= 30,000 + 5,000
= Rupees 35,000