Profit loss

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Profit loss

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Cost Price (CP): The price at which an article was bought.

Selling Price (SP): The price at which an article was sold.

Marked Price (MP): The price mentioned on the article or

the printed price.

In business situation, the cost price of goods or the

purchase price of goods is called investment. And the

selling price of goods is called earning. For example, if you

purchase a land for Rs 1,00,000 then you have invested

Rs 1,00,000. Now, if you sell this land for Rs 1,75,000

then you have earned Rs 1,75,000. Your profit is

Rs 1,75,000 1,00,000 = 75,000.

Profit (P): Profit is excess of SP over CP.

So, P = SP CP. In business conditions, profit is

excess of earning over investment.

Loss (L): Loss is the inverse of profit. Loss is excess of CP

over SP.

So,

L = CP SP

Alchemist.

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Cost Price.

All these when expressed in %age terms, are

calculated with Cost Price as a base.

Conventionally,

Profit/Loss

CP

Discount

SP

MP

Markup

figures.

For example, if you bought an article for Rs 3000 and

sold it for Rs. 3500 then your profit is Rs 500. Besides

mentioning P and L as absolute figures, we can mention

P and L as percent of CP also. Please note that base for

P% and L% is always CP unless and until something else is

specifically mentioned in question.

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then,

P% =

=

(Profit 100)

CP

(500 100)

= 16.66%

3500

(Profit 100) (500 100)

SP

3500

= 14.28%

P% =

Note:

Ponder over the difference in the P% when CP and SP

are taken as base. Thats why it is very important to find

out the base in questions related to Profit and Loss. CP

is always taken as base if nothing is mentioned. But if

question specifically says that profit% or loss% is

calculated on some other base then go ahead with that

base.

Illustration: A trader purchased an article for Rs. 1000 and

sold it for Rs. 1100. Find his Profit as a percentage of SP?

Profit % =

(100 100)

= 9.09%

1100

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L% when CP and SP are given.

From the given equation we can derive CP when SP

and P, L, P% or L% are given.

MP = CP + Markup

MP =

CP (100 + Markup%)

100

SP = CP + P

SP = CP L

SP =

CP (100 + Profit%)

100

SP =

CP (100 Loss%)

100

Similarly,

CP = SP P

CP = SP + L

CP =

(SP 100)

(100 + Profit%)

CP =

(SP 100)

(100 Loss%)

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decimal also. For example, 20% is equivalent to 0.2, 45% is

equivalent to 0.45 and so on. We can simplify our

calculations in some cases if we write percentage in decimal

form. Lets denote the decimal form of profit percentage by

symbol p and loss percentage by symbol L. When we work

with these our formulae will also change slightly and

become easier to calculate and understand.

SP = CP (1 + p)

SP = CP (1 L)

If there is a profit of 45%, then SP = (1 + 0.45) CP

or 1.45 CP

Similarly, if there is a loss of 20%, then SP = 0.8 CP

CP =

SP

(1 + p)

CP =

SP

(1 L)

a profit of 25%. Find CP and Profit?

Case 1: When P% is used

CP =

(100 + 25)

125

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625

625

(1 + 0.25) 1.25

CP =

Illustration: A tout had to sell cinema ticket of Amitabhs

Mrityudata for Rs. 24 and thus suffered a loss of 40%. For

how much he should have sold the ticket to gain 15%?

Rs. 24 represents 60% of ticket value.

Original value of ticket =

24 100

= 40

60

40 115

= Rs. 46

100

Illustration: If SP of 4 audiocassettes is equal to the CP of

5 audiocassettes, find the gain or loss%?

We know,

SP = CP + Profit or CP Loss

Method 1

Here,

4 SP = 5 CP

Or,

4 SP = 4 CP + 1 CP

1 CP

Profit% =

100 = 25%

4 CP

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Method 2

Or, from the above 4 SP = 5 CP

SP

CP

Therefore,

5

= 1.25

4

Profit % = 25 %

4 movie tickets, find the gain or loss%?

Here

5 SP = 4 CP

Or,

5 SP = 5 CP 1 CP

1 CP

Loss% =

100 = 20%

5 CP

Note:

Kindly notice the difference in this illustration and

previous illustration.

Also try this using the second method illustrated above.

Illustration: Gabber Singh bought bullets at 5 for rupee.

How many for a rupee must he sell to gain 25%?

100

paise = 20 paise.

5

SP of

one bullet = 20 1.25 = 25 paise

For a rupee he should sell 4 bullets.

Price of

one bullet =

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at a profit of 5% only. Gabbar Singh scolded him for such a

low profit margin. So, next time, Sambha sold Pistol for Rs.

750 more than the previous and thus made a profit of 20%.

Find the CP?

By charging Rs. 750 more, Samba earned 15%

(20 5)% more of CP;

So,

CP =

750

= Rs. 5,000

0.15

dipped. So Gabbar again scolded him. To increase sales,

Samba reduced price by 10% .In response, sales increased

by 20%. Find the percentage change in the total amount of

receipts?

We know, receipts = sales price

New sales = 1.2 old Sales (20% increase)

New price = 0.9 old price (10% reduction)

New receipts = 1.2 old price 0.9 old sales

= 1.08 old receipts (as old price

old sales = old receipts)

So, receipts grew by 8%

We can also use the successive %age formula here.

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Gabbar Singh. But they arrested Gabbar without using

bomb. So they sold 40 bombs at 20% profit, 35 bombs at

30% profit and 25 bombs at 40% profit. Had they sold all the

bombs at 35% profit they would have got Rs. 650 more.

Find the CP of one bomb?

Let

CP of one bomb = X

CP of 100 bombs = 100X

SP in first case = 40 1.2X + 351.30X

+ 251.4X = 128.5X

SP in second case = 100X 1.35 = 135X

So,

But

6.5X = 650

X = 100

balance defrauds 10% in selling. What % does he gain?

He actually sells 0.9 kg instead of l kg

Gain = 1 0.9 = 0.1 kg on every 0.9 kg actually sold.

0.1

Gain % =

= 100 = 11.11%

0.9

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Note:

Here you can derive a straight formula also.

Error

Gain% =

100

Actual Value

by 20%. Find the net gain/loss %.

Assuming, the cost was Rs. 1 per gm.

So, when he sells the customer 1000 gm,

He charges Rs. 1000 + 20% of Rs. 1000 = Rs.1200

But, using the faulty balance, he has given the

customer only 900gm which would have cost him only Rs.

900.

Hence, his profit is

(1200 900) 1

= 33.33%

900

3

On a shorter note,

He actually sells 0.9 kg instead of l kg and charges

worth 1.2 kg.

His gain is cost of 0.3 kg on incurring the cost of 0.9 kg.

Hence, his profit is

0.3

= 33.33%

0.9

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make himself profitable, he marks up his goods by 20%.

What is his actual gain or loss%?

Initially there is a loss of 10% because of the defect.

On the same thing, the markup is 20%. Hence we can

solve it using the successive %age formula.

Net profit % =

a + b + ab

20

= (10) + 20 + (10)

=8

100

100

So, by means of a false balance, he defrauds 10% in selling

goods and 10% in buying also. What % does he gain?

While buying he pays for 1 kg but gets 1.1 kg as he

defrauds 10%

He actually sells 0.9 kg instead of 1 kg as he defrauds

10% there also.

He actually sold 1.1 kg instead of

1.1

= 1.22 kg

0.9

actually.

So,

So,

gain% =

0.22 100

= 22%

1

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Anupam Kher Debdhar at 20 per rupee and 11 per rupee.

He mixes both the toffees and sells them at 15 for a rupee.

What is his net gain or loss?

Lets assume that he bought 660 toffees each.

(A number divisible by both 15, 11 and 20)

Total CP =

660 660

= 93

20

11

Total SP =

1320

= 88

15

Loss = 93 88 = 5

Loss% = 5

100

= 5.55%

93

discussed earlier. And that really made our work easy. We

took 660 as it is LCM of 20, 11 and 15 and thus completely

divisible by all of them, so that we had to work with natural

numbers only.

Illustration: Lakhan buys toffees from Anupam Kher

Debdhur at 20 per rupee and from Shakti at 11 per rupee,

paying both of them the same amount. He mixes both the

toffees and sells them at 15 for a rupee. What is his net gain

or loss?

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previous illustration.

If he pays a rupee to each one, in 2 rupee he gets 31

toffees and sells 30.

So his profit is 1 on 30 = 3.33%

Illustration: Ajit sold two containers of liquid oxygen for Rs.

4000 each to Mona and Lily. On one he made a profit of

20% and on other he lost 20%. Find his actual gain/loss and

% also?

Method 1

CP of the container 1 =

Rs. 4000

= Rs. 3333.33

1.20

CP of the container 2 =

Rs. 4000

= Rs. 5000

0.80

= Rs. 8333.33

Total SP = Rs. 4000 2 = Rs. 8000

Absolute Loss = 333.33

Loss % =

333.33

= 4%

8333.33

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Method 2

Whenever the SP of 2 articles are same and there is

equal % age profit and loss on each article,

202

Using formula, loss% =

% = 4%

100

Absolute loss =

=

(2 202 4000)

(1002 202 )

800 4000

= Rs. 333.33

9600

one he made a profit of 20% and on other he lost 20%. If

both the containers have cost him Rs. 4000 each, find his

actual gain/loss and % also?

Perfunctorily this looks like the above question. We can

end up doing this one by the formula and hence making a

mistake.

Since both of them cost equal, the absolute profit and

loss will also be equal and compensate for each other.

Hence

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Important Point

If two items are sold for Rs. A each, one at a gain of B%

and other at a loss of B%, there is always an overall loss

B2

%.

100

(2 B2 A)

. Please

(1002 B2 )

are sold at same SP.

If two items with same CP are sold, one at a gain of

B% and other at a loss of B%, then net profit or loss is

equal to zero.

DISCOUNT

On every article you buy from the market, a selling price

is written. That selling price is called Maximum Retailing

Price (MRP). But most of the times you dont buy goods at

MRP. Shopkeeper gives you some discount on (MRP). So

you paid (MRP discount) for the article that is the actual

SP for you. Here we have introduced two more important

concepts, MRP and Discount. MRP is also called List

Price. We have referred to this MRP as Marked Price

earlier.

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Important Point

1. Discount is always calculated on MRP or List Price

unless and until specifically mentioned.

2.

SP = MRP Discount

3.

value or percentage

4.

SP = MRP

5.

MRP =

(100 D%)

100

(SP 100)

(100 D%)

cost price and gives a discount of 30% to the wholesalers.

What profit percentage does the company make?

Lets assume the

CP = 100

Discount = 150

30

= 45

100

Profit% = (105 100)

100

= 5%

100

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the list price. How much above the company should mark

the CP of goods to have a profit of 10% after discount ?

Lets assume,

CP = 100

Actual SP represents 20% after discount

List price =

110

= 137.5

0.8

Markup = 37.5%

Illustration: A store offers an off-season discount of x%.

A further discount of 20% is offered on purchases more than

Rs. 1000. A person pays Rs. 1020 for an item listed at

Rs. 1500. How much is the off-season discount?

Method 1

Prior to the 20% discount, the item would have cost the

buyer

Rs. 1020

0.8

= Rs. 1275.

Hence,

225

Discount =

100%

1500

= 15 %

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Method 2

Since, we are combining the discounts, i.e. the same

article gets second discount on the first discounted price, we

can also use the successive %age formula.

Total Discount = (1500 1020)

100

1500

= 32%

Which is equivalent to

(x) + (20) + (x) (20)

= (20 + 0.8x)

100

Hence,

20 +0.8 x = 32,

Solving

x = 15

manages to get a profit of 20% on sales. What is his

markup?

Method 1

Let

Therefore,

MP

Discount

SP

Profit

CP

=

=

=

=

=

Markup =

100

20

80

20% of 80 = 16

64

36 100

= 56.25%

64

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Method 2

The calculations will be easier if we would have taken

the cost price to be 100.

CP = 100

Profit is 20% on SP = 25% on CP

Therefore,

Profit = 25

SP = 125

MP =

125

= 156.25

0.8

Markup = 56.25 %

Method 3

To use change in %ages when the base changes

Profit = 20% on SP

= 25% on CP

Discount is 20% on MP = 25% on SP

Using successive %age

25 + 25 + 2525

100

= 56.25%

Markup =

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EXERCISE

1.

If he had bought it for 20% less and sold it for Rs. 55

more, he would have had a profit of 40%. Find the cost

price of the article.

(a) Rs. 260

(b) Rs. 270

(c) Rs. 220

(d) Rs. 250

2.

he bought it at 20% less and sold it for Rs. 75 less, he

would have gained 25%. What is the cost price?

(a) Rs. 375

(b) Rs. 376

(c) Rs. 291

(d) Rs. 396

3.

and selling price would have been Rs. 100 less, the

profit would be 4% more. Find the cost price.

(a) Rs. 601

(b) Rs. 600

(c) Rs. 500

(d) None

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4.

chair at a loss of 8.33% but on the whole he gains

Rs. 25. On the other hand, if he sells the table at a loss

of 8.33% and the chair at a profit of 12.5%, then he

neither gains nor loses. Find the cost price of the table.

(a) Rs. 36

(b) Rs. 370

(c) Rs. 294

(d) Rs. 359

5.

increased by Rs. 50 and at the same time if its selling

price is also increased by Rs. 30, the percentage of

profit decreases by 33.33%. Find the cost price.

(a) Rs. 459

(b) Rs. 400

(c) Rs. 867

(d) None of these

6.

What is my gain %?

(a) 23%

(b) 19%

(c) 25%

(d) 98%

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7.

retailer. The retailer sells the pens at the marked price.

Find the percent profit of the retailer.

100

(a)

%

8

100

(b)

%

9

102

(c)

%

9

103

(d)

%

9

8.

sold at a loss of 10%, at what price should the

remainder be sold so as to gain 20% on the whole

transaction?

(a) Rs. 123

(b) Rs. 956

(c) Rs. 405

(d) Rs. 150

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9.

He sells the horses at 15% profit and the cows at 10%

loss. Thus he gets Rs. 375 as profit. Find the cost of 1

horse and 1 cow separately.

(a) Rs. 1200, Rs. 469

(b) Rs. 1100, Rs. 450

(c) Rs. 1200, Rs. 450

(d) None

and the rest at a loss of 3%. If there was an overall

profit of Rs. 540, find the value of the consignment.

(Hint: Use Alligation)

(a) Rs. 19, 000

(b) Rs. 16,000

(c) Rs. 15,000

(d) Rs. 18,000

11. Nandlal purchased 20 dozen notebooks at Rs. 48 per

dozen. He sold 8 dozen at 10% profit and the remaining

12 dozen at 20% profit. What is his profit percentage in

this transaction?

(Hint: Use Alligation)

(a) 16%

(b) 12%

(c) 15%

(d) None

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person to obtain 25 kg more for Rs. 225. What is the

reduction price per kg?

(a) 91p

(b) 90p

(c) 89p

(d) 78p

13. A grocer mixes 26 kg of sugar which cost Rs. 2 a kg

with 30 kg of sugar which cost Rs. 3.60 a kg and sells

the mixture at Rs. 3 a kg. What is his profit %?

(a) 6%

(b) 4%

(c) 8%

(d) 5%

14. A man purchases a certain number of mangoes at 3 per

rupee and the same number at 4 per rupee. He mixes

them together and sells them at 3 per rupee. What is

his gain %?

100

(a)

%

9

100

(b)

%

6

100

(c)

%

7

102

(d)

%

6

Alchemist.

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many must be sold for 4 rupees so as to gain 25%?

(a) 20

(b) 80

(c) 100

(d) 75

16. A person bought some oranges at the rate of 5 per

rupee and an equal number at 6 per rupee. He mixes

both the types and sells at 9 for rupees 2. In this

business he bears a loss of Rs. 42. Find out how many

oranges he bought in all.

(a) 1080

(b) 1100

(c) 1120

(d) None

17. A tradesman marks his goods at 25% above his cost

price and allows purchasers a discount of 12.5% for

cash. What profit% does he make?

75

(a)

%

3

54

(b)

%

8

76

(c)

%

8

75

(d)

%

8

Alchemist.

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How much % above cost price must be mark his goods

to make a profit of 10%?

300

(a)

%

18

300

(b)

%

17

300

(c)

%

19

301

(d)

%

19

19. Manju sells an article to Anju at a profit of 25%. Anju

sells it to Sonia at a gain of 10% and Sonia sells to

Bobby at a profit of 5%. If Sonia sells it for Rs. 231, find

the cost price at which Manju bought the article.

(a) Rs. 160

(b) Rs. l59

(c) Rs. 161

(d) Rs. 168

20. Satish marks his goods 25% above cost price but

allows 12.5% discount for cash payment. If he sells the

article for Rs. 875, find his cost price.

(a) Rs. 394

(b) Rs. 800

(c) Rs. 690

(d) Rs. 600

Alchemist.

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many must be sold for a rupee in order to gain 25%?

(a) 23

(b) 22

(c) 21

(d) 24

22. By selling oranges at 32 a rupee, a man loses 40%.

How many for a rupee should he sell in order to gain

20%?

(a) 13

(b) 22

(c) 16

(d) 17

23. A man bought a certain quantity of rice at the rate of

Rs. 150 per quintal. 10% of the rice was spoiled. At

what price should he sell the remaining to gain 20% of

his outlay?

(a) Rs. 200

(b) Rs. 201

(c) Rs. 300

(d) Rs. 400

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2

price, if by selling at

of that price there would be a

3

loss of 20%?

(a) 10%

(b) 30%

(c) 40%

(d) 20%

9

of its selling price and

10

sold it at 8% more than its selling price. Find his gain %.

(a) 21%

(b) 22%

(c) 20%

(d) 24%

allows a discount of 10% and gains 8%. If no discount

is allowed, find his gain %.

(a) 21%

(b) 22%

(c) 20%

(d) 24%

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he loses Rs. 200, but when he sells it at Rs. 6 a litre, he

gains Rs. 150. How much milk did he purchase?

(a) 340

(b) 468

(c) 350

(d) 342

28. 9 kg of rice cost as much as 4 kg of sugar; 14 kg of

sugar cost as much as 1.5 kg of tea; 2 kg of tea cost as

much as 5 kg of coffee; find the cost of 11 kg of coffee,

if 2.5 kg of rice cost Rs. 12.50.

(a) Rs. 462

(b) Rs. 759

(c) Rs. 783

(d) Rs. 700

29. A fruit merchant makes a profit of 20% by selling a

commodity at a certain price. If he charges Rs. 3 more

on each commodity, he would gain 50%. Find the first

selling price of that commodity.

(a) Rs. 11

(b) Rs. 17

(c) Cant say

(d) None of these

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increases by 20% and he decides to save 15% of his

Income, by what % has his saving increased?

(a) 80%

(b) 90%

(c) 100%

(d) 70%

31. A man sells two horses for Rs. 1710. The cost price of

the first is equal to the selling price of the second. If the

first is sold at 10% loss and the second at 25% gain,

what is his total gain or loss (in rupees)?

(a) Rs. 120

(b) Rs. 100

(c) Rs. 80

(d) Rs. 95

32. Rakesh calculates his profit % on the selling price

whereas Ramesh calculates his on the cost price. They

find that the difference of their profits is Rs. l00. If the

selling price of both of them are the same and both of

them make 25% profit, find their selling price.

(a) Rs. 3000

(b) Rs. 4000

(c) Rs. 2000

(d) Rs. 5000

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article, the shopkeeper gets a profit of 20%. Find his %

profit if he offers a discount of 20% on the same article.

20

(a)

%

4

20

(b)

%

3

21

(c)

%

4

(d) None

34. A farmer sold a cow and a calf for Rs. 760 and got a

profit of 10% on the cow and 25% on the calf. If he sells

the cow and the calf for Rs. 767.50 and gets a profit of

25% on the cow and 10% on the calf, find the cost price

of the calf.

(a) Rs. 500

(b) Rs. 380

(c) Rs. 280

(d) None of these

35. If oranges are bought at 11 for 10p and sold at 10 for

11p, what is the gain/loss %?

(a) 22%

(b) 23%

(c) 21%

(d) 31%

Alchemist.

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price but uses a weight of 875 gms for the kg weight.

Find his gain %.

100

(a)

%

6

100

(b)

%

8

100

(c)

%

5

100

(d)

%

7

37. A man buys milk at 60p per litre, adds one-third of

water to it and sells the mixture at 72p per litre. Find

profit %.

(a) 60%

(b) 39%

(c) 30%

(d) None

38. If mangoes are bought at 15 a rupee, how many must

be sold for a rupee to gain 25%?

(a) 11

(b) 12

(c) 14

(d) 15

All rights reserved. This course material is only for the use of bonafide students of Alchemist. It is not for sale.

2

price, if by selling at a

of that price there would be a

3

loss of 20%?

(a) 22%

(b) 20%

(c) 34%

(d) 43%

40. A man buys apples at a certain price per dozen and

sells them at eight times that price per hundred. Find

gain %.

(a) 4%

(b) 5%

(c) 4%

(d) 5%

41. A shopkeeper bought a table marked at Rs. 200 at

successive discounts of 10% and 15% respectively. He

spent Rs. 7 on transport and sold the table for Rs. 208.

Find his profit %.

(a) 30%

(b) 35%

(c) 45%

(d) 25%

All rights reserved. This course material is only for the use of bonafide students of Alchemist. It is not for sale.

to the cost price. Find the C.P.

(a) Rs. 60

(b) Rs. 40

(c) Rs. 30

(d) Rs. 50

43. I purchased a box full of pencils at the rate of 7 for

Rs. 5 and sold the whole box at the rate of 9 for Rs. 8.

In this process I gained Rs. 44. How many pencils were

contained in the box?

(a) 225

(b) 235

(c) 252

(d) None

44. A merchant professes to sell his goods at a loss of

10%, but weighs 750 gms in place of a kg. Find his real

loss or gain %.

(a) 22% loss

(b) 20% gain

(c) 40% gain

(d) 21% loss

45. By selling salt at Re. 1 a kg, a man gains 10%. By how

much must he raise the price so as to gain 21%?

(a) 6 paise

(b) 7 paise

(c) 9 paise

(d) 10 paise

Alchemist.

All rights reserved. This course material is only for the use of bonafide students of Alchemist. It is not for sale.

equal size. If he sells his milk at Rs. 5 a litre, he loses

Rs. 200; while selling it at Rs. 6 a litre, he would gain

Rs. 150 on the whole. Find the number of litres

contained in each cask.

(a) 36 liters

(b) 38 liters

(c) 39 liters

(d) none

47. A watch passes through three hands and each gains

25%. If the third sells it for Rs. 250, what did the first

pay for it?

(a) Rs. 128

(b) Rs. 129

(c) Rs. 130

(d) Rs. 124

48. A reduction of 40% in the price of bananas would

enable a man to obtain 64 more for Rs. 40. What is the

reduced price per dozen?

(a) Rs. 3

(b) Rs. 4

(c) Rs. 5

(d) Rs. 6

All rights reserved. This course material is only for the use of bonafide students of Alchemist. It is not for sale.

49. Goods are sold so that when 4 % is taken off the list

price, a profit of 20% is made. How much % is the list

price more than the cost price?

(a) 24%

(b) 25%

(c) 26%

(d) 27%

50. A man sells an article at 5% profit. If he had bought it at

5% less and sold it for Re. 1 less, he would have

gained 10%. Find the cost price.

(a) Rs. 200

(b) Rs. 300

(c) Rs. 400

(d) Rs. 250

All rights reserved. This course material is only for the use of bonafide students of Alchemist. It is not for sale.

All rights reserved. This course material is only for the use of bonafide students of Alchemist. It is not for sale.

ANSWERS KEY

1. (d)

2. (a)

3. (b)

4. (d)

5. (d)

6. (c)

7. (b)

8. (c)

9. (b)

10. (d)

11. (a)

12. (b)

13. (d)

14. (b)

15. (c)

16. (d)

17. (d)

18. (c)

19. (d)

20. (b)

21. (d)

22. (c)

23. (a)

24. (d)

25. (c)

26. (c)

27. (c)

28. (a)

29. (d)

30. (a)

31. (d)

32. (c)

33. (d)

34. (d)

35. (c)

36. (b)

37. (a)

38. (b)

39. (b)

40. (c)

41. (a)

42. (d)

43. (c)

44. (b)

45. (d)

46. (d)

47. (a)

48. (a)

49. (b)

50. (a)

All rights reserved. This course material is only for the use of bonafide students of Alchemist. It is not for sale.

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