Money
Profit and Loss
 The terms related to selling or buying items are:
 Cost Price
 Selling Price
 Marked Price
 Discount
 Cost Price: The item at which the
article is bought or the amount which is required to make an article
is called the cost price.
The cost price is abbreviated as â€śCPâ€ť.
 Selling Price: The amount at which
the product is sold is called the selling price of the article.
The selling price is abbreviated as â€śSPâ€ť.
 Marked Price: The amount which is
set by the seller as the label of the article is called the marked
price.
The marked price of the article is generally more than the cost price.
It is abbreviated as â€śMPâ€ť
 Discount: The amount which is offered by the seller to reduce the selling price is called the discount.
 While selling an article three conditions may arise:
 Cost Price is less than selling price, i.e., C.P < S.P
 Cost price is more than the selling price, i.e., C.P > S.P
 Cost price is equal to the selling price, i.e., C.P = S.P.
 Based on this condition the seller either makes a profit or a loss.
Profit
 Profit means a gain in amount.
 When the cost price is less than the selling price then we earn a profit.
 The formula to calculate the profit is â€śProfit = Cost price â€“ Selling Priceâ€ť.
Example: The cost price of an article is Rs 74 and the selling price is Rs 86 each. Find the profit made in selling 23 such articles.
Solution:
Step 1: The cost price of an article is Rs 74.
Multiply 74 by 23 to get the cost price of 23 articles.
74 Ă— 23 = 1,702
Step 2: The selling price of an article is Rs 86.
Multiply 86 by 23 to get the selling price of 23 articles.
86 Ă— 23 = 1,978
Step 3: Subtract 1,702 from 1,978 to get the profit.
1,978 â€“ 1,702 = 276
Therefore, the profit made in selling 23 articles is Rs 276.
Loss
 Loss means losing an amount.
 When the cost price is more than the selling price then we suffer loss.
 The formula to calculate loss is â€śLoss = Cost Price â€“ Selling Priceâ€ť.
Example: Bhavan bought 20 boxes of gifts for Rs 1,642. He sold each box for Rs 58. Find the loss or profit made by him.
Solution:
Step 1: The selling price of 1 box = Rs 58.
Number of boxes = 20
Total selling price = 58 Ă— 20
= 1,160
Step 2: The cost price of 20 boxes = Rs 1,642.
The selling price of 20 boxes = Rs 1,160
Loss = 1,642 â€“ 1,160
= 482
Calculation of Selling Price

If a seller provides a discount on the marked price, then the selling
price is calculated as â€śSelling Price = Marked Price â€“ Discountâ€ť.
Example: The marked price of the washing machine was Rs 29,780. The shopkeeper offers a discount of Rs 5645 as a â€śDiwali Saleâ€ť. Calculate the selling price of the washing machine.
Solution:
Marked Price = Rs 29,780.
Discount = 5645
Selling Price = 29,780 â€“ 5645
= 24,135
 If the cost price and the profit are given then the selling price is calculated as â€śSelling Price = Cost Price + Profitâ€ť.
 If the cost price and the loss is given then the selling price is calculated as â€śSelling Price = Cost Price â€“ Lossâ€ť.
Example: The cost price of the articles is Rs 24,906. The man sold the articles in a loss of Rs 904. Find the selling price
Solution:
Coat Price of an article = Rs 24,906.
Loss = 904
Selling price = Rs 24,906 â€“ 904
= Rs 24,002
Calculation of Cost Price

If an additional amount is spent on repairing or modifying an article then
the total cost price of an article is equal to the sum of the price at
which the article is bought and the additional price which is spent on the
articleâ€ť.
Example: A man bought a motorbike for Rs 25,000. He spent Rs 3500 on paperwork, and Rs 7000 for changing the motor parts. At what price should he sell the motorbike to make a profit of Rs 3000.
Solution:
Step 1: Amount spend on paper work = 3500
Amount spend on motor parts = Rs 7000
Total additional cost = Rs 3500 + Rs 7000 = Rs 10,500Step 2: Cost price of the motorbike = Rs 25,000.
Additional cost = Rs 10,500
Total cost price = Rs 25,000 + 10,500 = Rs 35,500Step 3: Total cost price = Rs 35,500
Profit = Rs 3000
Selling Price = Rs 35,500 + Rs 3000
= Rs 38,500  If the selling price and the profit are given then the cost price is calculated as â€śCost Price = Selling Price â€“ Profitâ€ť.
 If the selling price and the loss are given then the cost price is calculated as â€śCost Price = Selling Price + Lossâ€ť.
Example: A man makes a profit of Rs 2768 in selling 20 articles for Rs 54 each. Calculate the cost price of the article.
Solution:
Step 1: Selling Price of an article
= Rs 54.
Number of articles = 20
Total selling price = 54 Ă— 20
= 1080
Step 2: Selling Price of the
article = Rs 1080
Profit = Rs 2768
Cost price of an article = 1080 + 2768
= Rs 3,848
Multiple Transaction
Example:
Rahul sold a bicycle to Banu at Rs 5780 thereby making a profit of Rs 700. Banu sold it Harika at the loss of Rs 850. Find the cost price of the bicycle for Rahul and Harika.
Solution:
Step 1: The selling price for Rahul =
Rs 5780
Profit made by Rahul = Rs 700
Cost price of Bicycle for Rahul = Rs 5780 â€“ Rs 700
= Rs 5080
Step 2: The selling price for Rahul
is equal to the Cost price of the Bicycle for Banu.
Therefore, the Cost price of the Bicycle for Banu = Rs 5780.
Loss = Rs 850
Selling Price of Bicycle for Banu = Rs 5780 â€“ Rs 850
= Rs 4,930
The selling price for Banu is equal to the cost price for Harika.
Therefore, the cost price of a bicycle for Harika = Rs 4,930.