Question

Sumit borrowed a capital of Rs. 50,000 to start his food products business. In the first year he suffered a loss of 20%. He invested the remaining capital in a new sweets business and made a profit of 5%. How much was his profit or loss computed on his original capital ?

Answer 1

Given,

Money spent by Sumit to borrow capital= Rs 50,000
Loss suffered by sumit in first year = 20% of Rs 50, 000

$=\frac{20}{100}\times 50,000=10,000$

Remaining capital = Rs 50,000 - Rs 10,000 = Rs 40,000

He uses this capital in sweet business and earns a profit of 5%

Profit = 5% of Rs 40,000

$=\frac{5}{100}\times 40,000=20000$
Capital after profit = Rs 40,000 + Rs 2000 = Rs 42,000
Overall Loss = Rs 50,000-Rs 42,000=Rs 8000

Loss% =$\frac{8000}{50,000}\times 100=16$ %

Hence, sumit has a total loss of 16%