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Profit and loss

Definition of cost price and selling price: The purchasing price of anything is called cost price and the selling price of that thing is called selling price.

Or, The expenditure which is done for buying or manufacturing commodities is the cost price and the price that is obtained by selling commodities is the selling price.

Definition of profit: If the selling price is more than the cost price then it’s called profit. The amount by which the S.P is greater than the C.P is the amount of profit.

∴profit= Selling price (S.P)– Cost price(C.P)

Definition of loss: If the selling price is less than the cost price then it’s called loss. The amount by which the C.P is greater than the S.P is the amount of loss.

∴Loss=Cost price- Selling price


Some formula for profit and loss:

  1. profit= Selling price (S.P)– Cost price(C.P)

  2. Selling price (S.P)= Cost price(C.P)+ profit

  3. Cost price(C.P)= Selling price (S.P)– profit

  4. Loss=Cost price- Selling price

  5. Cost price = Selling price + Loss

  6. Selling price = Cost price –Loss



*** For comparison, profit or loss is expressed as percentage. Profit or loss is always calculated in terms of cost price.

Exercise: If the selling price of a watch is Tk. 625, the loss is 10%; what should be the price of the watch if a profit of 10% is to be gained by selling it?

Solution: Let, the cost price of the watch = Tk. 100

In 10% loss selling price is = Tk. (100-10)

= Tk. 90

In 10% profit selling price = Tk. (100+10)

=Tk. 110

Now in 10% loss,

If the selling price is Tk. 90 then cost price = Tk. 100

∴″   ″     ″       ″       ″   1   ″     ″     ″   =Tk. (100÷90)

∴″   ″     ″       ″       ″ 625 ″     ″     ″   =Tk. (100×625)÷90

= Tk. 694.44

Again, in 10% profit,

If cost price Tk. 100 then selling price = Tk. 110

∴″   ″     ″       ″     1   ″     ″     ″     ″   =Tk. (110÷100)

∴″   ″     ″     ″ 694.44   ″     ″     ″   ″   =Tk. (110×694.44)÷100


Answer: Selling price is Tk. 793.88.


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