Aptitude - Profit and Loss - Discussion

How to calculate 1475/21?

How did 70% come? Please explain?

Good question @Supriya.

In solution see Initially CP is 100 and SP is 420, so Profit is 320%.

Now CP is 125 and SP is 420, so Profit should be 420 - 125 = 295 means 236% should be the correct answer.

Thanks for your clear explanation @Malini.

The point is in 'what context' the profit percentage is to be calculated?

Is it relative to cost price or selling price?

Well!, when you're asked to find the profit %, its relative to the 'selling price'.

That's why in the above problem the answer is 70%. If we consider the cost price as the base to find the profit %, then it would be 236%. But this is wrong.

To understand this more,

Draw a pie diagram, taking the selling price (420) as the full circle and mark the proper fractions for cost price (125) and for the profit (295). Just see the portion of profit and determine the area covered in the circle, that's the profit %.

In general, we calculate profit % relative to C. P (because CP remains constant) but if we are asked to calculate profit % relative to S. P (as in this question) we have to take S. P.

As base price provided S. P is given constant. Since in this question S. P is given constant, we can take S. P as the base price.

From where the value 1475 come? Give explanation.

We calculate the profit percentage with the help of cost price but in above problem why we are using selling price, tell me the reason.

Hey, @Nitesh, you find here to profit not profit %, then how can you say that the answer becomes 70. Read question carefully and then go ahead.

How can you change the sp there is clearly written that sp remains constant?