Profit Loss Formula – Explanation – Solved examples

Profit loss formula

Cost Price

Cost Price is the total price for purchasing an item. It consists of two parts:

1. Buying price: It is the price used for buying.
2. Overhead charges: It is the extra amount of money spent on the item for miscellaneous activities like repairing etc. There may or may not be overhead charges for any purchase.

Cost Price = Buying price + Total overhead charges (if any)

Selling Price

It is the price we get after selling.

Loss

When the selling price becomes less than the cost price, loss occurs. It is the difference between the cost price and the selling price.

Loss = Cost Price – Selling Price

Loss( in %)  =\frac{\text { Loss }}{\text { Cost price }} \times 100=\frac{\text { Cost price-Selling price }}{\text { Cost price }} \times 100

Profit

When the selling price becomes more than the cost price, profit occurs. It is the difference between the selling price and the cost price.

Profit = Selling Price – Cost Price

Profit ( in %) =\frac{\text { Profit }}{\text { Cost price }} \times 100=\frac{\text { Selling price }-\text { Cost price }}{\text { Cost price }} \times 100

Marked Price 

It is the price marked by the seller on the product meant for selling.

Discount

Discount is the concession given by the seller to the customer on the marked price. It is the difference between marked price and selling price.

Marked Price = Selling price + Discount

Discount ( in %) =\frac{\text { Discount }}{\text { Marked price }} \times 100=\frac{\text { Marked price }-\text { Selling price }}{\text { Marked price} } \times 100

Let us now revise the basic concepts and formulas before solving the questions.

1. Cost Price = Buying price + Total overhead charges (if any)
2. Profit = Selling Price – Cost Price
3. Loss = Cost Price – Selling Price
4. Profit ( in %) =\frac{\text { Profit }}{\text { Cost price }} \times 100=\frac{\text { Selling price }-\text { Cost price }}{\text { Cost price }} \times 100
   
5. Loss( in %) =\frac{\text { Loss }}{\text { Cost price }} \times 100=\frac{\text { Cost price }-\text { Selling price }}{\text { Cost price }} \times 100
   
6. Marked Price = Selling price + Discount
   
7. Discount ( in %) =\frac{\text { Discount }}{\text { Marked price }} \times 100=\frac{\text { Marked price }-\text { Selling price }}{\text { Marked price }} \times 100
   

Solved examples

• Vickey brought 10 apples for Rs 80 and sold them at Rs 100. Find his profit percentage.

Solution:

Cost price of 10 apples = Rs 80

Selling price of 10 apples = Rs 100

Profit = Selling Price – Cost price = Rs 100 – Rs 80 = Rs 20

Profit percentage=\frac{\text { Selling price-Cost price }}{\text { Cost price }} \times 100=\frac{100-80}{80} \times 100=25 \%

Hence, Vickey got a profit of 25% 

• Mohit brought a second-hand motorcycle for Rs 20,000 and spent Rs 6,000 for repairing it. At what price should he sell the motorcycle to get a profit of 10%?

Solution:

Cost of the motorcycle brought by Mohit = Rs 20,000

Repairing charges = Rs 6000

Cost price = Rs 20,000 + Rs 6000 = Rs 26,000

Profit = 10% of cost price

           = 10% of Rs 26,000

           = \frac{10}{100}×26,000

           = Rs 2600

Selling Price = Cost price + Profit = Rs 26000 + Rs 2600 = Rs 28600

Hence, Mohit should sell the motorcycle at Rs 28600 to get a profit of 10%.