While managing money, we should always understand the profit and loss that can occur.

When we invest our money, and in return, we get an amount that is less than the investments, then we incur a loss.

The loss is calculated by subtracting the amount from the investment.

When we invest our money, and in return, we get the amount which more than the investments, then we get profit. The profit is calculated by subtracting the investment from the amount.

**1) Danish Invested Rs 6400 in Share Marketing and Received Rs 7800 at the End of Five Years. Calculate the Profit.**

Amount invested = Rs 6400

The amount received at the end of five years = Rs 7800

Profit = Amount received at the end of five years – Amount invested.

= Rs 7800 – Rs 6400

= Rs 1400

Therefore, Danish received Rs 1400 as profit.

**2) Sonali Has a Saving Account in a Bank. She Saved Rs 5000 for 1 Year. If the Bank Provides Her with 10% Interest. Find the Total Amount She Will Receive at the End of 1 Year.**

Step 1:

Amount saved = Rs 5000.

Rate of interest = 10%

Interest is calculated on the total amount.

Interest amount = Rs 10% of 5000.

=Rs(^{10}_{100} × 5000)

=Rs(10 × 50)

=Rs 500

Step 2:

Amount saved = Rs 5000

Interest provided by bank = Rs 500

Total amount received at the end of the month = Rs 5000 + Rs 500

= Rs 5500

**Addition and Subtraction Word Problem**

**1) Ranu and Jiya Want to Visit Museum, but They Don’t Have Money. Ranu Took a Loan of Rs 2500 From Her Friend and Promised to Return Her Rs 3500 After Two Months. Jiya Took a Loan From the Bank and Had to Pay Rs 1000 for Three Months. Calculate Who Has to Pay More Interest. And How Much More?**

Step 1:

Amount Ranu took from her friend = Rs 2500.

Amount she has to return to her friend is Rs 3500.

Interest paid = Rs 3500 – Rs 2500

= Rs 1000

Step 2:

Amount Jiya took from the bank = Rs 2500

Amount she paid in 1 month = Rs 1000

Amount she paid in 3 months = Rs 1000 × 3

= Rs 3000

Step 3:

Amount Jiya took from the bank = Rs 2500.

Amount she has to pay = Rs 3000

Interest paid by Jiya = Rs 3000 – Rs 2500

= Rs 500

Step 4:

Interest paid by Ranu = Rs 1000

Interest paid by Jiya = Rs 500

Therefore, Ranu paid more interest.

Amount Ranu paid more = Rs 1000 – Rs 500

= Rs 500

Therefore, Ranu paid Rs 500 more than Jiya.

Aman Earns Rs 7000 in a Month. He Spends Rs 2200 on Food and Rs 1000 on the Rent of the House. He Bought Gifts for His Family and Spent Rs 1160 on Gifts. He Saved the Remaining Amount. Calculate the Amount He Saved.

**2) Aman Earns Rs 7000 in a Month. He Spends Rs 2200 on Food and Rs 1000 on the Rent of the House. He Bought Gifts for His Family and Spent Rs 1160 on Gifts. He Saved the Remaining Amount. Calculate the Amount He Saved.**

Step 1:

Amount spend on food = Rs 2200

Amount spend on rent of the house = Rs 1000

Amount spend on gifts = Rs 1160

Total amount spends = Rs 2200 + Rs 1000 + Rs 1160

= Rs 4360

Step 2:

Total amount earned = Rs 7000

Total amount spends = Rs 4360

Amount saved = Rs 7000 – Rs 4360

= Rs 2640

Therefore, he saved Rs 2640.

**3) Priya Wants to Gift a Cell Phone Worth Rs 36,240 to Her Friend. But She Didn’t Have So Much Money. She Decided to Choose the EMI Option for a Year. Calculate the Monthly Installment.**

The price of the cell phone is Rs 36,240

Number of months in a year = 12

Monthly installment = Rs (36,240 ÷ 12)

= Rs 3020

Therefore, Priya has to pay Rs 3020 every month.

**4) The Given Pie Chart Shows How Sushant Manages His Money in a Month. Observe the Chart Properly and Answer the Following Questions:**

**Where Does He Spend the Most Money?****Where Does He Spend the Least Money?****How Much Money Does He Save in a Year?****Find the Total Amount He Spends on Food and Transport.****Find the Total Amount He Spends on LIC and Mediclaim.**

- According to the given pie chart the most amount was spent on food. He spends Rs 4000 on food.
- According to the pie chart the least amount was spent on transport. He spends Rs 1260 on transportation.
- The amount he saved in a month = Rs 2000

Number of months in a year = 12

The amount he saved in a year = Rs (2000 × 12)

= Rs 24,000

Therefore, he saved Rs 24,000 in a year. - The amount he spends on food = Rs 4000

The amount he spends on transport = Rs 1260

Total amount spends on food and transport = Rs 4000 + Rs 1260

= Rs 5260

Therefore, the total amount spent on food and transport was Rs 5260. - The amount he spends on LIC = Rs 3000

The amount he spends on Mediclaim = Rs 1440

Total amount spends on LIC and Mediclaim = Rs 3000 + Rs 1440

= Rs 4440

Therefore, the total amount spent on LIC and Mediclaim was Rs 4440.

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