Profit or loss is calculated when a person sells something to someone else. If he sells it for more price than he purchased, then he makes profit other he is at loss.
Let,
CP = cost price, the cost of the item shop owner paid
SP = selling price, the price the shop owner gets on selling the same item
If the shop owner sells the item for more than paid for it, SP > CP, then profit is given as
Profit = selling price (SP) – cost price (CP)
If the shop owner sells the item for less than paid for it, SP < CP, then loss is given as
Loss = cost price (CP) – selling price (SP)
Loss and Profit can be calculated in percent also using the below formulas:
Loss % = (Loss/Cost price) × 100
Profit % = (Profit/Cost price) × 100
Example:
John bought a bicycle for $339 and sold to a buyer for $382. Did he make profit or loss by selling the bicycle? .How much is loss or profit?
As the selling price is more than the cost price, John has profit in selling the bicycle.
Profit = SP – CP
= $382 – $339 = $43
We can also find the profit percentage.
Profit % = (Profit/Cost price) × 100
= 43/339 × 100 = 12.68%
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