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What You Must Know to Solve Profit and Loss Questions | RBI Grade B

What You Must Know to Solve Profit and Loss Questions

Planning to write the RBI Grade B exam? If so, make sure you register at the RBI Grade B Officer Recruitment Notification and begin your preparation without wasting any further time. Use the RBI Grade B Topper’s Strategy  if you need and ensure that your study material aligns with the Suggestions for the RBI Grade B Study Material. In this blog, we will focus on the profit and loss topic of quantitative aptitude. If you are looking for a general guide for the Quantitative Aptitude, then check out the RBI Grade B Quantitative Aptitude Preparation Tips

Profit and Loss for Bank PO is quite important. In any exam whether that is the SBI PO or the RBI Grade B examination, the topic of profit and loss is always included. Profit and Loss for Bank PO examinations is a fundamental topic, because it can be used or applied in more complicated questions such as Data Interpretation (DI). In this blog post, we shall see all that is needed to solve questions from Profit and Loss for Bank PO exams.        

Profit and Loss Kinds of Questions

There are various kinds of profit and loss questions that one can face in the examination. About 7 major types of questions can be expected from profit and loss topic.

  • Simple profit and loss question (C.P. or S.P. calculation) – You must compute either the cost price (C.P.) or the selling price (S.P.) in the question. This is the simplest kind of profit/loss question you can expect.
  • Different Varieties of Items at Sold at Common S.P. – Seller purchases at least 2 varieties of some product at 2 different C.P. and sells them at 1 common S.P. and his profit or loss must be combined.
  • Same S.P., Equal Profit and Equal Loss % – Seller buys 2 or more products (at different C.P.) and sells both at the same S.P., but sells one at a gain of x % and the other at a loss of x %. In this case, the loss percentage can be computed by the following formula: Loss % = (X/10)^2
  • Dishonest Seller (False Weight Stone) – When it is given that the seller will use a false weighing stone or weight, the following formula can be used to determine or denote his true or actual profit that he made:

Real Profit % = Error / (True Value – Error) * 100, where

Error = True Weighing Stone – False Weighing Stone

True Value = the weight of a weighing stone that an honest seller will use

  • Multiple Transactions on Profit and Loss – Multiple transactions take place here in a continuous manner. For example, a person 1 buys a product at C.P. and sells it at 30% profit to person 2, who then sells it at a discount of 15% to person 3, person 3 sells the product at INR 5,000. What was the C.P. of the product?
  • On Marked Price (M.P.) and Discounts – A product’s list price (or marked price) is X rupees. However, the shopkeeper sells it to customer A for a discount of y %, what is the net profit or loss for the shopkeeper?
  • Profit and Loss Computations with Ratios – Generally included as an extension to the other type questions. This kind of questions include ratios/proportions along with the ordinary profit/loss computations.

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Profit and Loss Terms

When preparing for profit and loss for bank PO, there are a few terms that you should be familiar with.

  1. Cost Price (C.P.) – the price at which an article is purchased
  2. Selling Price (S.P.) – the price at which an article is sold
  3. If C.P. > S.P., there is a loss
  4. If C.P. < S.P., there is a profit
  5. Marked Price (M.P.) – the listed price on an article or the price that is marked on the article
  6. Discount = when S.P. – M.P./L.P.
  7. Marked Price = List Price

Profit and Loss Formula

  1. Discount = Marked Price (M.P.) – Selling Price (S.P.)
  2. Gain % = (Gain/S.P.) * 100
  3. Loss % = (Loss/C.P.) * 100
  4. P. = [(100 + Gain %) / 100)] * C.P.
  5. P. = [(100 – Loss %) / 100)] * C.P.
  6. P. = [100 / (100 + Gain %)] * S.P.
  7. P. = [100 / (100 – Loss%)] * S.P.
  8. If article sold at a gain of 10%, then S.P. = 110% of C.P.
  9. If article sold at a gain of 78%, then S.P. = 178% of C.P.
  10. If article sold at a gain of x %, then S.P. = (100+x) % of C.P.
  11. If article sold at a loss of 10%, then S.P. = (100-10) % of C.P.
  12. If article sold at a loss of x%, then S.P. = (100-x) % of C.P.

Profit and Loss Tips

  1. The Marked Price (M.P.) is different from the Selling (S.P.), because a shopkeeper has the sole authority/discretion to decide if he wants to sell a product at the Listed Price (L.P.)/Marked Price (M.P.) or at a price lower than that, in which case there would be a discount.
  2. Profits and losses are always computed as % of the cost price.
  3. Discounts are technically considered as losses because the Selling Price is less than the Marked Price, but they may not necessarily be so.
  4. Multiplying Factor (M.F.) is a relative confusing concept. It refers the % increase in comparison of any two numbers. For any percentage increase of i %, the multiplication factor shall be (1 + i/100)
  5. When a seller sells 2 products at the SAME S.P. and makes a profit of x% one and a loss of x% in the other, there will ALWAYS be a loss.

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