Page 144 - Start Up Mathematics_5

10 Profit and Loss and

Unitary Method

Ravi bought a video game for ` 1,100. After a few weeks, he sold it to Sahil for ` 700. So,
Ravi lost ` (1,100 – 700) = ` 400. On the other hand, Sahil got the game only for ` 700 which
was ` 400 less than its actual cost. So, we can say that Ravi had a loss of ` 400 while Sahil
had a gain of ` 400.
When a businessman purchases a certain commodity for his business, the price at which he
buys it is called the Cost Price of the commodity and is denoted as C.P.

After buying, he sells the commodity to the customers. The price at which the commodity
is sold by the businessman is called its Selling Price and is denoted as S.P.
If S.P. > C.P., then there is Profit or Gain. If C.P. > S.P., then there is Loss.

Profit = S.P. – C.P. Loss = C.P. – S.P.

S.P. = C.P. + Profit S.P. = C.P. – Loss
C.P. = S.P. – Profit C.P. = S.P. + Loss

Sometimes when a businessman buys a certain commodity, he has to pay transportation,
shipping or other such charges. These charges are called overhead expenses. The overhead
expenses along with the cost price of the commodity constitute the actual cost price of that
commodity.

Actual C.P. = C.P. + Overhead expenses

Example 1: Rajiv buys a dining table with 6 chairs for ` 16,000. He sells it to a customer
for ` 17,825. Find his loss or profit.

Solution: C.P. = ` 16,000 S.P. = ` 17,825
Since S.P. > C.P., there is a profit.
Profit = S.P. – C.P.

= ` 17,825 – ` 16,000 = ` 1,825
So, Rajiv earns a profit of ` 1,825.

Example 2: Rashi owns a jewellery shop. She sells a gold necklace for ` 58,500 which
actually costed her ` 62,000. Find her loss or gain.

Solution: C.P. = ` 62,000 S.P. = ` 58,500
Since C.P. > S.P., there is a loss.

Loss = C.P. – S.P.
= ` 62,000 – ` 58,500 = ` 3,500
So, Rashi had a loss of ` 3,500.

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