Profit and Loss

Profit and Loss formula is used in mathematics to determine the price of a commodity in the market and understand how profitable a business is. Every product has a cost price and selling price. Based on the values of these prices, we can calculate the profit gained or the loss of money for a particular product. Also, we will learn the profit percentage and gain percentage formula here.

For a shopkeeper, if the value of selling price is more than the cost price of a commodity, then its a profit and if the cost price is more than the selling price, it becomes a loss. Here, in this article, we will discuss maths profit as well as loss concepts along with tricks to solve problems based on it.

Profit and Loss Definitions in Maths

Let us learn maths profit and loss concepts. It is better explained in terms of cost price and selling price. We will also learn the concepts with the help of examples.

Cost Price

The amount paid for a product or commodity to purchase it is called a cost price. Also, denoted as CP. This cost price is further classified into three different categories:

  • Fixed Cost: The fixed cost is constant, it doesn’t vary under any circumstances
  • Variable Cost: It could vary depending as per the number of units

Selling Price

The amount for which the product is sold is called Selling Price. It is usually denoted as SP. Also sometimes called a sale price.

Marked Price Formula

This is basically labelled by Shopkeepers to offer a discount to the customers in such a way that,

  • Discount = Marked Price – Selling Price
  • And Discount Percentage = (Discount/Marked price) x 100


The amount gained after selling a product more than its cost price.


The amount, the seller gets after selling the product less than its cost price, is mentioned as a loss.

Profit and Loss Formulas

Now let us find profit formula and loss formula.

  • The profit or gain is equal to the selling price minus cost price.
  • Loss is equal to cost price minus selling price.
Profit or Gain = Selling price – Cost Price

Loss = Cost Price – Selling Price

The formula for profit and loss percentage is:

Profit percentage = (Profit /Cost Price) x 100

Loss percentage = (Loss / Cost price) x 100


Tricks For Profit and Loss

As you have learned until now how to calculate profit as well as loss and also the percentage of them. Now let us learn some tricks or formulas to solve maths problems based on gain and loss, starting from the general formulas.

  1. Profit, P = SP – CP; SP>CP
  2. Loss, L = CP – SP; CP>SP
  3. P% = (P/CP) x 100
  4. L% = (L/CP) x 100
  5. SP = {(100 + P)/100} x CP
  6. SP = {(100 – L)/100} x CP
  7. CP = {100/(100 + P)} x SP
  8. CP = {100/(100 – L)} x SP
  9. Discount = MP – SP
  10. SP = MP -Discount
  11. For false weight, profit percentage will be P% = (True weight – false weight/ false weight) x 100.
  12. When there are two successful profits say m% and n%, then the net percentage profit equals to (m+n+mn)/100
  13. When the profit is m% and loss is n%, then the net % profit or loss will be: (m-n-mn)/100
  14. If a product is sold at m% profit and then again sold at n% profit then the actual cost price of the product will be: CP = [100 x 100 x P/(100+m)(100+n)]. In case of loss, CP = [100 x 100 x P/(100-m)(100-n)]
  15. If P% and L% are equal then, P = L and %loss = P2/100

Let us explain the above-given formulas with examples.

Profit and Loss Questions

Q. 1: Suppose a shopkeeper has bought 1 kg of apples for 100 rs. And sold it for 120 kg. How much is the profit he got?


Cost Price for apple is 100 rs.

Selling Price for apple is 120 rs.

Then profit gained by shopkeeper is ; P = SP – CP

P = 120 – 100 = Rs. 20/-

Q.2: For the above example calculate the percentage of the profit gained by the shopkeeper.


We know, Profit percentage = (Profit /Cost Price) x 100

Therefore, Profit percentage = (20/100) x 100 = 20%.

Q.3: A man buys a fan for Rs. 1000 and sells it at a loss of 10%. What is the selling price of the fan?

Solution: Cost Price of the fan is Rs.1500

Loss percentage is 15%

As we know, Loss percentage = (Loss/Cost Price) x 100

15 = (Loss/1000) x 100

Therefore, Loss = 150 rs.

As we know,

Loss = Cost Price – Selling Price

So, Selling Price = Cost Price – Loss

= 1000 – 150

Selling Price = R.850/-

Q.4: If a pen cost Rs.50 after 10% discount. Then what is the actual price or marked price for Pen?

Solution: MP x (100 – 10) /100 = 50

MP x 90/100 = 50

MP = 50 x 100/90

MP = Rs. 55.55/-

Points to remember:

  • For-profit, the selling price should be more than the cost price
  • For loss, cost price should be more than the selling price.
  • The percentage value for profit and loss is calculated in terms of cost price.

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