What is Profit?
Profit is defined as the resultant difference in the amount when a product is sold for a price more than the original price. In simple words, if the original price is less than the selling price then the seller makes a profit on that product.
What is Loss?
Loss is defined as the difference in amount that is obtained when the seller sells a product for a price lesser than the original price. In simple words, if the original price is greater than the selling price then the seller has made a loss on that product.
Original Price
The original price of a product is the actual asking price for a product by a seller from the customer.
Selling Price
The selling price of a product is the amount received from the customer, either more than the original price, or, less than the original price, by the seller for a product.
Formulas Related to Profit and Loss
- Profit = Selling Price – Original Price
- Loss = Original Price – Selling Price
- Profit Percentage = \(\frac{Selling~Price~-~Original~Price}{Original~Price}\) x 100%
- Loss Percentage = \(\frac{Original~Price~-~Selling~Price}{Original~Price}\) x 100%
Solved Examples
Example 1: The price of a water bottle is $15 and the seller sells it at $17. What is the profit gained by selling the water bottle?
Solution:
The original price of the bottle is $15 and selling price is $17.
The profit can be calculated by using the profit formula.
Profit = Selling Price – Original Price [Profit formula]
= $17 – $15
= $2
Hence, the profit gained by selling the water bottle is $2.
Example 2: John sold his bike for $3650 and that too at a loss of $350. What is the original price of the bike?
Solution:
The selling price of the bike is $3650 and the loss is $350.
The original price of the bike can be calculated using the loss formula.
Loss = Original Price – Selling Price [Loss formula]
$350 = Original Price – $3650 [Substitute the values]
Original Price = $350 + $3650 = $4000
Therefore, the original price of the bike is $4000.
Example 3: Find out the loss percentage when a product is sold out at $2250 and its original price is $2400.
Solution:
The selling price of the product is $2250 and its original price is $2400. The loss percentage can be calculated by using the formula for loss percentage.
Loss Percentage = \(\frac{Original~Price~-~Selling~Price}{Original~Price}\) x 100% [Loss percentage formula]
= \(\frac{2400~-~2250}{2400}\) x 100% [Substitute the values]
= \(\frac{150}{24}\) % [Simplify]
Hence, the loss percentage is 6.25%.
Example 4: John went to buy a shirt with an original price of $500. While selling the shirt the shop keeper made a profit of 8%. What is the selling price of the shirt?
Solution:
The original price of the shirt was $500 and the shopkeeper made a profit of 8%. The selling price can be calculated by using the formula for profit percentage.
Profit Percentage = \(\frac{Selling~Price~-~Original~Price}{Original~Price}\) x 100% [Profit percentage formula]
8% = \(\frac{Selling~Price~-~500}{500}\) x 100% [Substitute]
8 = \(\frac{Selling~Price~-~500}{5}\) [Simplify]
8 x 5 = Selling Price – 500 [Cross multiply by 5]
Selling Price = 40 + 500 = 540
So, the selling price of the shirt is $540.
Loss is defined as the difference of amount obtained when the seller sells a product for a price less than the original price.
The profit is defined as the difference of amount obtained when the seller sells a product for a price more than the original price.
The selling price of a product is the amount received by the seller from the customer for a product.
The original price of a product is the amount asked by the seller for a product, from the customer.