Worked Example 1
A shopkeeper buys a bag for Rs 500 and sells it for Rs 600.
Find the profit in rupeesSP − CP = 600 − 500 = Rs 100
Divide by the cost price100 ÷ 500 × 100 = 20% profit
Why not divide by 600?Dividing by 600 measures the gain against money that includes the gain itself.
Worked Example 2
A radio marked at Rs 1500 with a 20% discount, which cost the shop Rs 1000.
Discount comes off the MARKED price20% of 1500 = 300, so SP = Rs 1200
Now compare with the COST priceProfit = 1200 − 1000 = Rs 200
Turn it into a percentage20% profit
Two different percentages, two different basesThe discount came from 1500 and the profit from 1000. Same number here, but a coincidence.
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