Understanding the Cost Price and Selling Price

Oct 13, 2025 by wbrum.org 77 views

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Introduction

In the world of business, profit is the ultimate goal for any shopkeeper. The profit is calculated by subtracting the cost price from the selling price. However, the question arises when the shopkeeper sells an article at a price that is $25\%$ above the cost. In this article, we will explore the concept of profit percent and how to calculate it when the selling price is higher than the cost price.

Understanding the Cost Price and Selling Price

The cost price of an article is the price at which the shopkeeper purchases the article from the supplier. On the other hand, the selling price is the price at which the shopkeeper sells the article to the customer. When the shopkeeper sells an article at a price that is $25\%$ above the cost, it means that the selling price is $125\%$ of the cost price.

Example

Cost Price and Selling Price

Let's consider an example to understand the concept better. Suppose the cost price of an article is $100. If the shopkeeper sells the article at a price that is $25\%$ above the cost, the selling price will be $125\%$ of $100, which is $125.

Cost Price	Selling Price
$100	$125

Calculating the Profit Percent

The profit percent is calculated by finding the difference between the selling price and the cost price, and then dividing it by the cost price. In this case, the profit percent can be calculated as follows:

Profit Percent = ((Selling Price - Cost Price) / Cost Price) × 100

Example

Calculating the Profit Percent

Using the example above, we can calculate the profit percent as follows:

Profit Percent = ((125 - 100) / 100) × 100 = (25 / 100) × 100 = 25%

Conclusion

In conclusion, when the shopkeeper sells an article at a price that is $25\%$ above the cost, the profit percent can be calculated by finding the difference between the selling price and the cost price, and then dividing it by the cost price. In this case, the profit percent is $25\%$ . This concept is essential for shopkeepers to understand, as it helps them to determine the profit margin and make informed decisions about pricing and inventory management.

Formula for Profit Percent

The formula for profit percent is:

Profit Percent = ((Selling Price - Cost Price) / Cost Price) × 100

Example Problems

Problem 1

A shopkeeper purchases an article at a cost price of $80 and sells it at a price that is $20\%$ above the cost. What is the profit percent?

Solution

The selling price is $120\%$ of the cost price, which is $120. The profit percent can be calculated as follows:

Profit Percent = ((120 - 80) / 80) × 100 = (40 / 80) × 100 = 50%

Problem 2

A shopkeeper purchases an article at a cost price of $120 and sells it at a price that is $15\%$ above the cost. What is the profit percent?

Solution

The selling price is $115\%$ of the cost price, which is $138. The profit percent can be calculated as follows:

Profit Percent = ((138 - 120) / 120) × 100 = (18 / 120) × 100 = 15%

Tips and Tricks

When calculating the profit percent, make sure to use the correct formula: (Selling Price - Cost Price) / Cost Price × 100.
When the selling price is higher than the cost price, the profit percent will be positive.
When the selling price is lower than the cost price, the profit percent will be negative.

Frequently Asked Questions

Q: What is the profit percent when the selling price is $25\%$ above the cost price?

A: The profit percent is $25\%$ .

Q: How do I calculate the profit percent when the selling price is higher than the cost price?

A: Use the formula: (Selling Price - Cost Price) / Cost Price × 100.

Q: What is the formula for profit percent?

A: The formula for profit percent is: (Selling Price - Cost Price) / Cost Price × 100.

Conclusion

In conclusion, the profit percent is an essential concept for shopkeepers to understand, as it helps them to determine the profit margin and make informed decisions about pricing and inventory management. By using the correct formula and following the tips and tricks provided, shopkeepers can calculate the profit percent accurately and make informed decisions about their business.

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Introduction

In our previous article, we discussed the concept of profit percent and how to calculate it when the selling price is higher than the cost price. However, we understand that there may be many questions and doubts that readers may have. In this article, we will address some of the frequently asked questions related to profit percent.

Q&A

Q: What is the profit percent when the selling price is $25\%$ above the cost price?

A: The profit percent is $25\%$ . This is because the selling price is $125\%$ of the cost price, and the profit percent can be calculated as follows:

Profit Percent = ((125 - 100) / 100) × 100 = (25 / 100) × 100 = 25%

Q: How do I calculate the profit percent when the selling price is higher than the cost price?

A: Use the formula: (Selling Price - Cost Price) / Cost Price × 100.

Q: What is the formula for profit percent?

A: The formula for profit percent is: (Selling Price - Cost Price) / Cost Price × 100.

Q: What is the profit percent when the selling price is $10\%$ above the cost price?

A: The profit percent is $10\%$ . This is because the selling price is $110\%$ of the cost price, and the profit percent can be calculated as follows:

Profit Percent = ((110 - 100) / 100) × 100 = (10 / 100) × 100 = 10%

Q: How do I calculate the profit percent when the selling price is lower than the cost price?

A: Use the formula: (Cost Price - Selling Price) / Cost Price × 100.

Q: What is the profit percent when the selling price is $20\%$ lower than the cost price?

A: The profit percent is $-20\%$ . This is because the selling price is $80\%$ of the cost price, and the profit percent can be calculated as follows:

Profit Percent = ((100 - 80) / 100) × 100 = (20 / 100) × 100 = -20%

Q: Can I use the profit percent formula to calculate the selling price?

A: Yes, you can use the profit percent formula to calculate the selling price. Rearrange the formula to solve for the selling price:

Selling Price = (Cost Price + (Profit Percent / 100) × Cost Price)

Q: What is the selling price when the cost price is $100 and the profit percent is $25\%$ ?

A: The selling price is $125. This is because the profit percent is $25\%$ , and the selling price can be calculated as follows:

Selling Price = (100 + (25 / 100) × 100) = (100 + 25) = 125

Conclusion

Formula for Profit Percent

The formula for profit percent is:

Profit Percent = ((Selling Price - Cost Price) / Cost Price) × 100

Formula for Selling Price

The formula for selling price is:

Selling Price = (Cost Price + (Profit Percent / 100) × Cost Price)

Example Problems

Problem 1

A shopkeeper purchases an article at a cost price of $80 and sells it at a price that is $20\%$ above the cost. What is the profit percent?

Solution

The selling price is $120\%$ of the cost price, which is $120. The profit percent can be calculated as follows:

Profit Percent = ((120 - 80) / 80) × 100 = (40 / 80) × 100 = 50%

Problem 2

A shopkeeper purchases an article at a cost price of $120 and sells it at a price that is $15\%$ above the cost. What is the profit percent?

Solution

The selling price is $115\%$ of the cost price, which is $138. The profit percent can be calculated as follows:

Profit Percent = ((138 - 120) / 120) × 100 = (18 / 120) × 100 = 15%

Tips and Tricks

When calculating the profit percent, make sure to use the correct formula: (Selling Price - Cost Price) / Cost Price × 100.
When the selling price is higher than the cost price, the profit percent will be positive.
When the selling price is lower than the cost price, the profit percent will be negative.

Frequently Asked Questions

Q: What is the profit percent when the selling price is $25\%$ above the cost price?

A: The profit percent is $25\%$ .

Q: How do I calculate the profit percent when the selling price is higher than the cost price?

A: Use the formula: (Selling Price - Cost Price) / Cost Price × 100.

Q: What is the formula for profit percent?

A: The formula for profit percent is: (Selling Price - Cost Price) / Cost Price × 100.