Profit, Loss & Marked Discounts

Profit or loss is always calculated on the Cost Price (CP) unless explicitly specified otherwise. Discounts are always computed on the Marked Price (MP).

Exam Frequency: 3 to 5 questions in SSC, TCS, and Banking

Essential Formulas & Shortcut Rules

Profit % = [(SP - CP) / CP] × 100

SP > CP indicates profit.

Loss % = [(CP - SP) / CP] × 100

CP > SP indicates loss.

SP = MP × (100 - Discount %) / 100

Selling price after retail discount.

Dishonest Dealer Gain % = [Error / (True Value - Error)] × 100

Profit earned when using false weights.

Worked Step-by-Step Examples

Example 1: A merchant marks his goods 40% above the cost price and allows a discount of 15% on the marked price. What is his net profit percentage?

Step-by-Step Mathematical Derivation:

•Let CP = ₹100.

•Marked Price (MP) = 100 + 40% of 100 = ₹140.

•Discount = 15% of 140 = (15/100) × 140 = ₹21.

•Selling Price (SP) = 140 - 21 = ₹119.

•Net Profit = SP - CP = 119 - 100 = ₹19 on ₹100 base = 19%.

Answer: 19% profit

💡 Speed Shortcut: Using successive formula: Markup = +40%, Discount = -15%. Net = 40 - 15 + [40 × (-15) / 100] = 25 - 6 = 19%.

Common Exam Traps to Avoid

✕Calculating discount percentage on Cost Price rather than Marked Price.
✕Assuming selling two items at equal price with x% gain and x% loss results in break-even (it always produces an overall loss of x²/100 %).

Interactive Practice Drill (2 Questions)

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Profit, Loss & Marked Discounts Practice Drill

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1Profit, Loss & Marked Discounts

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By selling an article for ₹720, a shopkeeper incurs a loss of 10%. At what price should he sell it to gain 20%?

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