Profit and Loss
When a thing is sold for more than it cost the seller, it is said to be sold at a profit. If it is sold for less than the cost, it is sold at a loss. Hence,
| Profit | = | Selling Price | - | Cost Price. |
| Loss | = | Cost Price | - | Selling Price. |
A profit or loss is generally reckoned as a percentage.
It is always understood that the percentage is reckoned on the cost price.
Example: I buy wheat at 60 cents and sell it for 75 cents. What per cent do I gain?
Solution: I gain the difference between 75 cents and 60 cents, or 15 cents. 15 cents is 25% of the cost. Hence, I gain 25%.
Work:
| 75 cents | - | 60 cents | = | 15 cents. |
| 15 cents | ÷ | 60 cents | = | .25, or 25%. |
Example: I bought flour at $3.50 per barrel. For what must I sell it to gain 20%?
Solution: I must sell it for 100% of the cost plus 20% of the cost, or 120% of the cost.
120% of $3.50 = $4.20.
∴ I must sell it at $4.20.
Example: I sold my carriage for 80% of its cost and received $90 for it. What was the cost?
Solution:
1% of the cost is 1⁄80 of $90, or $1.125.
100% of the cost = 100 × $1.125, or $112.50.