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JNVST >> Concepts >> Arithmetic Fundamentals >> Profit & Loss: Calculating profit, loss, and percentage profit/loss
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Profit & Loss: Calculating profit, loss, and percentage profit/loss

🚀 Profit and Loss is a fundamental concept in mathematics that helps us understand how much money we gain or lose in a transaction. This concept is widely used in daily life, especially in buying and selling goods. Let's explore this topic with simple examples and explanations.

Examples💡

Example 1: Ramesh bought a bicycle for Rs. 2000 and sold it for Rs. 2500. To find the profit, we subtract the cost price from the selling price: Profit = Selling Price - Cost Price = Rs. 2500 - Rs. 2000 = Rs. 500. To find the percentage profit, we use the formula: Percentage Profit = (Profit / Cost Price) * 100 = (500 / 2000) * 100 = 25%.
Example 2: Sita bought a saree for Rs. 1500 and sold it for Rs. 1200. To find the loss, we subtract the selling price from the cost price: Loss = Cost Price - Selling Price = Rs. 1500 - Rs. 1200 = Rs. 300. To find the percentage loss, we use the formula: Percentage Loss = (Loss / Cost Price) * 100 = (300 / 1500) * 100 = 20%.
Example 3: A shopkeeper bought 100 kg of rice at Rs. 30 per kg and sold it at Rs. 35 per kg. First, calculate the total cost price: Total Cost Price = 100 kg * Rs. 30 = Rs. 3000. Then, calculate the total selling price: Total Selling Price = 100 kg * Rs. 35 = Rs. 3500. Profit = Total Selling Price - Total Cost Price = Rs. 3500 - Rs. 3000 = Rs. 500. Percentage Profit = (Profit / Total Cost Price) * 100 = (500 / 3000) * 100 = 16.67%.

Common Mistakes to Avoid⚠️

  • Mistake 1: Confusing cost price and selling price. Always remember, cost price is what you pay to buy an item, and selling price is what you receive when you sell it.
  • Mistake 2: Forgetting to multiply by 100 when calculating percentage profit or loss. Always multiply the fraction by 100 to convert it into a percentage.
  • Mistake 3: Using the wrong formula for profit and loss. Ensure you use Profit = Selling Price - Cost Price and Loss = Cost Price - Selling Price.
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