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Asked in a 2000 paperModerate

A owns a house worth Rs. 10000. He sells it to B at a profit of 10% based on the worth of the house. B sells the house back to A at a loss of 10% in this transaction A gets:

Correct answer: C. Profit of Rs. 1100

  • A. No profit No loss
  • B. Profit of Rs. 1000
  • C. Profit of Rs. 1100
  • D. Profit of Rs. 2000

Explanation

A sells the house for Rs. 10,000 × 1.10 = Rs. 11,000. B then sells it back for Rs. 11,000 × 0.90 = Rs. 9,900, so A receives Rs. 11,000 and pays Rs. 9,900, making a profit of Rs. 1,100. The likely error is to assume the 10% gain and 10% loss cancel, although they apply to different bases.

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Profit and loss compare the cost price and selling price of an item, using profit or loss percentages based on the cost price unless stated otherwise. Questions include marked price, discount, successive discounts, commission, and finding an unknown price, with care needed to distinguish discount from loss.

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