Profit, Loss & Discount • Topic 1 of 6

Cost, Selling & Marked Price

Three prices run this entire chapter and CAT mixes them deliberately to trip you. Cost price (CP) is what the seller spends to acquire the goods, including any overheads like transport or repairs — these get ADDED to CP, never to SP. Selling price (SP) is the amount the buyer actually pays. Marked price (MP), also called list or tag price, is the inflated sticker from which a discount is later given. The golden rule of bases: profit and loss are always measured on CP, while discount is always measured on MP. So a chain like "marked 40% above cost, then 25% off" means MP = 1.4·CP and SP = 0.75·MP. The single fastest CAT habit is to assume CP = ₹100 (or 100 units); then MP, discount and SP all become clean numbers you can read off in one pass without algebra.

✅ Solved examples

1. An item costs ₹800 and is marked 50% above cost. Find the marked price.
MP = 800 × 1.50 = ₹1,200.
2. A trader buys goods for ₹2,000, spends ₹200 on transport, and sells at ₹2,640. Find the profit.
True CP = 2000 + 200 = 2200. Profit = 2640 − 2200 = ₹440.
3. An article marked at ₹1,500 is sold after a 20% discount. Find the selling price.
SP = 1500 × 0.80 = ₹1,200.
4. Goods costing ₹100 are marked 40% above cost, then a 25% discount is given. Find the SP and the profit %.
MP = 140; SP = 140 × 0.75 = 105. Profit = 105 − 100 = ₹5 ⇒ 5% on CP.

✏️ Practice — try these, take hints as needed

1. An item costing ₹600 is marked 30% above cost. Marked price?
MP = CP × (1 + mark-up).
600 × 1.30.
Read off the multiplier.
₹780
2. CP is ₹500, repair cost ₹50, sold for ₹660. Profit?
Add repair to CP.
True CP = 550.
SP − CP.
₹110
3. MP is ₹2,400, discount 15%. Selling price?
SP = MP × (1 − d).
2400 × 0.85.
Multiply.
₹2,040
4. CP ₹100, marked 60% above cost, 25% discount. Selling price?
MP = 160.
SP = 160 × 0.75.
Compute.
₹120
5. An article sells for ₹450 at a 10% discount on its marked price. Marked price?
SP = MP × 0.90.
MP = SP ÷ 0.90.
450/0.9.
₹500

📝 Topic test — 8 questions

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