Profit – Buying Low and Selling High
Profit is the gain made when something is sold for more than it cost. It is one of the most important ideas in business and everyday financial decisions.
Key Terms
| Term | Meaning |
|---|---|
| Cost Price (CP) | What you paid to buy or make the item |
| Selling Price (SP) | What you sold the item for |
| Profit | SP minus CP (when SP is greater than CP) |
| Profit % | Profit expressed as a percentage of the cost price |
Formulas
Profit = Selling Price minus Cost Price. Profit % = (Profit / Cost Price) times 100.
Worked Examples
A trader buys a watch for 40 and sells it for 52.
Profit = 52 - 40 = 12. Profit % = (12 / 40) times 100 = 30%.
A farmer buys produce for 250 and sells for 325.
Profit = 325 - 250 = 75. Profit % = (75 / 250) times 100 = 30%.
Find the selling price if CP = 60 and profit = 25%.
Profit amount = 25% of 60 = 15. SP = 60 + 15 = 75. Or: SP = 60 times 1.25 = 75.
Find the cost price if SP = 84 and profit = 40%.
SP = CP times 1.40. CP = 84 / 1.40 = 60.
Key Takeaways
- Profit = SP minus CP.
- Profit% is always calculated on the cost price.
- To find SP given CP and profit%: SP = CP times (1 + profit%/100).
- To find CP given SP and profit%: CP = SP / (1 + profit%/100).
Practice Questions
- A phone bought for 120 is sold for 156. Find the profit and profit %.
- A car bought for 8,000 is sold for 9,600. What is the profit percentage?
- An item has a cost price of 45 and is sold at a 20% profit. Find the selling price.
- An article is sold for 390 at a profit of 30%. What was the cost price?
- A grocer buys 50 kg of rice for 30 and sells at 0.80 per kg. Find the total profit and profit %.