Always identify the base
Profit and loss percentages are calculated on the cost price. Discounts are calculated on the marked price. Most mistakes come from using the wrong base, so write down "CP", "SP" and "MP" at the start of every problem.
Worked examples
Example 1. An article costs 500 and is sold for 575. Profit = 75, so profit% = 75/500 × 100 = 15%.
Example 2. An item is marked at 800 and sold at a 20% discount, giving a 25% profit. SP = 800 × 0.8 = 640. CP = 640 ÷ 1.25 = 512.
Practise next
Strengthen the base with percentage questions, then try simple interest for similar rate-based thinking. Banking aspirants can see how these topics are used in the banking quant section.
