Profit and loss
Compare the price a shopkeeper paid with the price he sold at.
Paid ₹300, sold for ₹430
Kishanlal buys a sweater from a wholesaler for ₹300. He sells it to a customer for ₹430.
How many rupees did Kishanlal gain on this sweater?
What this lesson covers
The idea
When the selling price is greater than the cost price there is a profit equal to selling price – cost price; when it is less than the cost price there is a loss.
Paid ₹300, sold for ₹430
Kishanlal buys a sweater from a wholesaler for ₹300. He sells it to a customer for ₹430.
How many rupees did Kishanlal gain on this sweater?
- ₹130
- ₹430
- ₹730
Two pins on a price line
The cost price is the blue pin and the selling price is the orange pin. Move the selling price and watch the stretch between the pins. Two shopkeepers are in the tabs.
Selling above or below the cost price
When the selling price is greater than the cost price there is a profit equal to selling price − cost price; when it is less than the cost price there is a loss.
Kishanlal: he paid ₹300 and sold at ₹430, which is more. Profit = 430 − 300 = ₹130
Raghu: he paid ₹35 per kg, so 10 kg cost 10 × 35 = ₹350. He sold the 10 kg for ₹300, which is less. Loss = 350 − 300 = ₹50
For a loss, take the smaller price away from the larger one: cost price − selling price. If the two prices are equal there is no profit and no loss.
Notes
When the selling price is greater than the cost price there is a profit equal to selling price − cost price; when it is less than the cost price there is a loss.
Check yourself
A shopkeeper buys a box of pens for ₹80 and sells it for ₹95. What is his profit (in ₹)?
Answer: 15
95 − 80 = 15, so the profit is ₹15.
A tailor buys cloth for ₹480 and sells it for ₹420. What is his loss (in ₹)?
Answer: 60
480 − 420 = 60, so the loss is ₹60.
Which of these sales is a loss?
A shopkeeper buys 10 kg of apples at ₹60 per kg and sells all of it for ₹720. What is his profit (in ₹)?
Answer: 120
The 10 kg cost him 10 × 60 = ₹600. Profit = 720 − 600 = ₹120.
- Bought for ₹200, sold for ₹180 — correct. Yes! ₹180 is less than ₹200, so the shopkeeper has a loss of ₹20.
- Bought for ₹120, sold for ₹150. ₹150 is more than ₹120, so this is a profit of ₹30.
- Bought for ₹90, sold for ₹90. The selling price equals the cost price, so there is no profit and no loss.
- Bought for ₹75, sold for ₹80. ₹80 is more than ₹75, so this is a profit of ₹5.