Single correct option
A trader sells two articles at the same selling price. On the first he gains 25% and on the second he loses 20%. On the whole transaction he makes
- A. no profit, no loss
- B. a profit of about 2.5%
- C. a loss of about 2.44%
- D. a loss of about 2.5%
Show answer and solution
Answer: (C) a loss of about 2.44%
Let each selling price be 100.
CP of first = 100/1.25 = 80; CP of second = 100/0.8 = 125.
Total CP = 205, total SP = 200.
Loss = 5/205 × 100 ≈ 2.44%.
Why not 'no profit no loss' (+25 − 20 ≈ +5 or 0)? Percentages are on different bases; the loss-making article has the larger cost, so it dominates. 2.5% is 5/200, i.e. loss wrongly computed on SP.
CP of first = 100/1.25 = 80; CP of second = 100/0.8 = 125.
Total CP = 205, total SP = 200.
Loss = 5/205 × 100 ≈ 2.44%.
Why not 'no profit no loss' (+25 − 20 ≈ +5 or 0)? Percentages are on different bases; the loss-making article has the larger cost, so it dominates. 2.5% is 5/200, i.e. loss wrongly computed on SP.
Saved on this device. Sign in or create a free account to keep it on every device.