Money • Topic 5 of 7

Profit and Cost (Elementary Understanding)

At the primary level, profit and loss are taught as an everyday idea, not as a formula with percentages. The cost price is the money a shopkeeper pays to buy or make a thing, and the selling price is the money a customer pays to buy it from the shop. If the selling price is more than the cost price, the shopkeeper gains, and that gain is the profit: profit equals selling price minus cost price. If the selling price is less than the cost price, the shopkeeper loses money, and that shortfall is the loss: loss equals cost price minus selling price. For example, if a toy is bought for Rs 40 and sold for Rs 55, the profit is 55 - 40 = Rs 15; if it had been sold for only Rs 35, the loss would be 40 - 35 = Rs 5. The whole idea rests on a simple subtraction once children can tell which price is bigger. Teachers usually act this out with a classroom shop so that children feel the difference between buying and selling, and learn that a sale can end in a gain or a loss depending on the two prices. Percentage profit and loss come much later; at this stage the focus is firmly on the rupee difference.

✅ Solved examples

1. A toy is bought for Rs 40 and sold for Rs 55. Find the profit.
Profit = SP - CP = 55 - 40 = Rs 15. The selling price is more, so it is a profit.
2. A pen costs the shopkeeper Rs 12 and is sold for Rs 10. Is it a profit or a loss, and how much?
SP (10) is less than CP (12), so it is a loss. Loss = CP - SP = 12 - 10 = Rs 2.
3. A fruit seller buys a basket of mangoes for Rs 200 and sells them all for Rs 260. Find the profit.
Profit = 260 - 200 = Rs 60.
4. A book bought for Rs 90 is sold for Rs 90. What is the profit or loss?
SP equals CP, so there is neither profit nor loss. Profit/Loss = 0.

✏️ Practice — try these, take hints as needed

1. A bag is bought for Rs 150 and sold for Rs 175. Find the profit.
SP is bigger, so profit.
Profit = SP - CP = 175 - 150.
Rs 25 profit
2. A shopkeeper buys a clock for Rs 220 and sells it for Rs 200. Find the loss.
SP is smaller, so loss.
Loss = CP - SP.
Rs 20 loss
3. A cup costs Rs 18 and is sold for Rs 25. How much is gained?
Gain means profit.
25 - 18.
Rs 7 profit
4. A trader buys goods for Rs 500 and sells them for Rs 470. Find the loss.
CP is more than SP.
500 - 470.
Rs 30 loss

📝 Topic test — 8 questions

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