Smart Methods are a blessing in exams like SBI PO, IBPS and SSC CGL. Read this post for a smart method to solve Profit and Loss Problems.
A frequently
asked topic in competitive exams like SBI PO, IBPS and SSC CGL, Exam Profit and Loss problems can be very time consuming and also
need you to remember a long list of formulas that can be confusing and
difficult. But you don’t need to worry because we have a smart method that will
solve this problem for you.
In the last blog
posts in this series of smart methods, this trick will help you solve profit
and loss problems in 5 10 seconds that would otherwise take 30 45 seconds.
Profit and Loss
The price at which an article is purchased by the seller is
called its => Cost Price (CP).
The price at which an article is sold is called its => Selling
Price (SP).
Profit or Gain => The
difference between SP and C.P (if SP is greater than CP)
Loss => The difference between CP and SP (if
CP is greater than SP)
Now, this is a list that we all know verbatim since childhood
and have sworn by it while solving all problems related to profit and loss.
Formulas to Solve Profit and Loss Problems
Now this is the super long list that we spent nights mugging up in school and probably still swear by.
Example of Profit and Loss Problems
A
shopkeeper marks his goods in such a way that even after allowing a discount of
20%, he makes a profit of 12%. How much percent above the cost price is the marked
price?
1) 32% 2) 8% 3) 12% 4) 40% 5) None of theses
Conventional Method to Solve Profit and Loss Problems
Standard approach to the above
question starts with mentally going through the list of formulas after reading
the question. Then you replace the values in the equation and solve it.
Step 1:
Assuming ‘M’ to
be the marked price we get, S= [ (100 20)/100] x M= 80M/ 100  (i)
Step 2:
Assuming ‘C’ to
be the cost price we get, S= [(100+ P)/ 100] x C = 112C/ 100  (ii)
Step 3:
From (i) and (ii),
80M/100 = 112C/100
Step 4:
M= 112C/ 80 =
1.4C
Step 5:
M= 140% of CP
Therefore the
Marked Price is 40% above the Cost Price

Smart method to Solve Profit and Loss Problems
The correct answer of course! But just
too many formulas, assuming variables, forming equations, equating variables
and then solving it… All this takes almost 40 seconds, which is definitely not
the time you can afford to spend on it in an exam. Times to solve the same
question with a smarter method, to save some time and reduce some steps by using
Effective Percentages.
We know the formula for effective percentage
is A= B + C + (B x C)/ 100
Step 1:
Using the above
formula we get P = D + M + (DxM)/100
12 = 20 + M +
(20 x M)/100
Step 2:
M – M/5 = 12 + 20
Step 3:
4M/5 = 32
M = 40
Therefore Marked
Price is 40% above the Cost Price
Watch our expert faculty explain this time
saving smart method.
Try solving the following profit and loss
problems using this smart method
Question 1: A
shopkeeper marks his goods in such a way that after allowing a discount of 10%,
he gains 17%. How much percent above C.P. is the marked price?
1)
50% 2) 30% 3) 27% 4) 7% 5) None of these
Question 2: A
shopkeeper marks his goods in such a way that after allowing a discount of 20%,
he gains 28%. How much percent above C.P. is the marked price?
1) 60%
2) 32% 3) 48% 4) 56% 5) None of these
Do write your answers in the
comments below along with the time you saved on using this smart method.
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