A spice dealer bought 12 quintals of pepper at 11,000 rupees a quintal, expecting a price rise. He spent 1,000 rupees for cleaning the pepper. But the prices actually started to fall and so he sold this all at 10,500 rupees a quintal, to avoid heavier losses later. How much is his loss in this deal?
Quantity of pepper bought by the spice dealer = 12 quintals
Price of one quintal of pepper = Rs 11000
⇒ Total cost = (Quantity of the pepper bought) × (Price of one quintal of pepper)
= 12 × Rs 11000
= Rs 132000
Amount spent on cleaning the pepper = Rs 1000
Cost price = Rs 132000 + Rs 1000
= Rs 133000
Selling price of one quintal of pepper = Rs 10500
Total selling price = Rs 10500 × 12
= Rs 126000
Loss = Selling price − Cost price
= Rs 133000 − 126000
= Rs 7000
Thus, the dealer incurred a loss of Rs 7000 in the deal.