Worked examples — Profit, loss, discount, simple interest — basic applications
Everything below rests on one habit from the parent: pick the base, then divide by it. If percentages themselves feel shaky, revisit Percentages first.
The scenario matrix
Every problem in this topic is one of these cells. We will hit all of them.
| # | Cell (case class) | What makes it different | Example |
|---|---|---|---|
| A | Profit forward — CP & SP given | direct, base = CP | Ex 1 |
| B | Loss forward — SP < CP | the sign flips | Ex 2 |
| C | Back out the base (the trap) | CP unknown, must divide not multiply | Ex 3 |
| D | Zero / break-even | SP = CP, profit = 0 | Ex 4 |
| E | Full chain CP→MP→discount→SP→profit | two different bases in one problem | Ex 5 |
| F | SI forward — find interest & amount | base = P, scaled by T | Ex 6 |
| G | SI reverse — find R (or P or T) | isolate one variable | Ex 7 |
| H | Fractional time — months, not years | convert T | Ex 8 |
| I | Exam twist — combine ideas / limiting value | word problem stitching cells | Ex 9 |
The picture below is the map every example lives on: which base am I dividing by?

Cell A — Profit, forward
Cell B — Loss, forward (the sign flips)
Cell C — Back out the base (the classic trap)
An item sold for SP = ₹1500 gave a 25% profit. Find CP.
Forecast: many people compute . Is that right? Hold that thought.
- Write what the percentage acts on: the 25% is a profit on CP, so Why this form? The base of the percentage is the unknown CP, not the known SP. The extra 25% sits on top of CP.
- Solve the one-variable equation (this is just Linear Equations): Why divide, not multiply? To undo "×1.25" you divide by 1.25. Taking would apply 25% to the wrong base (SP).
Verify: ✓ And note answer — the naive method fails, exactly as warned.
Going up 25% multiplies by 1.25. Going down 25% multiplies by 0.75. Since , you can never reverse a rise by subtracting the same percent.
Cell D — Zero / break-even (degenerate case)
A shopkeeper buys goods for CP = ₹640 and, to clear stock, sells at SP = ₹640. Find profit%, then find profit% if he sells at ₹640 but had marked it ₹800 with a discount.
Forecast: what's a profit% of zero rupees gain?
- Profit . Why this matters? This is the boundary between profit and loss — the "zero input". Everything is well-defined here; nothing breaks.
- Profit% . Why not undefined? We divide by CP (640), which is nonzero — so the fraction is a perfectly fine . (Dividing by profit would be nonsense, but we never do that.)
- The discount side: MP = 800, SP = 640, so Why base = MP now? Discount always sits on the marked price — a different base from profit. Break-even on profit and a 20% discount coexist happily.
Verify: ✓ and ✓.
Cell E — Full chain (two bases in one problem)
A shopkeeper buys a bag at CP = ₹400, marks it up to MP = ₹600, and offers a 10% discount. Find the final profit%.
Forecast: is the final profit% closer to 35% or 50%?
- Apply discount to MP (base = MP): Why 0.9? The customer pays 90% of the tag.
- Now switch base to CP for profit: Why change base? Discount lived on MP; profit lives on CP. Same problem, two bosses (see the map's two colours).
- Profit% .
Verify: ✓ The chain closes.
This case extends to several discounts in Marked Price and Successive Discounts — each discount multiplies, never adds.
Cell F — Simple interest, forward
P = ₹5000, R = 8% per year, T = 3 years. Find SI and the amount A.
Forecast: three years at 8% — roughly a quarter of P as interest?
- Interest for one year . Why /100? R is a percent — "8 per hundred" means multiply by .
- Multiply by T (simple interest re-uses the same P each year): Why just multiply by 3? "Simple" means no stacking — each year earns the identical ₹400. (Stacking would be Compound Interest.)
- Amount .
Verify: ✓
The figure below shows why simple interest is a straight line — equal steps every year.

Cell G — Simple interest, reverse (isolate a variable)
₹2000 earns ₹360 simple interest in 2 years. Find R.
Forecast: ₹360 on ₹2000 over 2 years — single-digit rate?
- Start from and solve for R: Why this rearrangement? R is the only unknown; multiply both sides by to leave R alone. (Pure Linear Equations.)
- Substitute:
Verify (units too): ✓ Rate comes out as a pure percent per year, as it should.
Cell H — Fractional time (months, not years)
P = ₹4000, R = 6% per year, T = 9 months. Find SI.
Forecast: less than a full year, so interest is under ₹240 (the 1-year figure). Guess.
- Convert months to years: Why convert? R is per year. Feeding "9" as if it were years would give 12× too much interest.
- Apply the formula:
Verify: one full year would give ; three-quarters of ₹240 is ✓ Consistent.
Using gives — over half the principal in nine months. Absurd. If your interest looks huge, check the time unit first.
Cell I — Exam twist (stitching cells + a limiting value)
Riya wants an amount of ₹6300 back from a simple-interest deposit of P = ₹5000 at R = ? over T = 4 years. She also asks: what happens to the required rate as T grows very large?
Forecast: she needs ₹1300 of interest — will R be above or below 8%?
- Interest needed . Why? Amount = principal + interest, so interest is the target minus what she started with.
- Solve for R with : Why this form? Same reverse move as Cell G — isolate R.
- Limiting behaviour (the twist): for a fixed target interest ₹1300, As grows, R shrinks toward — the longer you wait, the smaller the rate needed to reach the same interest. It never hits exactly 0 (that would need infinite time). Why care? This is the "limiting input" cell of the matrix: the formula stays sensible as T → ∞, approaching but never reaching zero.
Verify: at R = 6.5%, , so ✓ And ✓.
Recall Which cell was which? (cover the answers)
- Ex 3 "SP=1500 at 25% profit, find CP" is which trap? ::: Cell C — must divide by 1.25, never multiply by 0.75
- Ex 4 profit% at break-even? ::: 0% — well-defined because we divide by CP (nonzero)
- Ex 5 which base for the discount, which for the profit? ::: discount on MP (600), profit on CP (400)
- Ex 8 why convert 9 months? ::: R is per year, so T must be in years → 9/12 = 0.75
- Ex 9 required rate as T → ∞ for fixed interest? ::: it shrinks toward 0 like 26/T, never reaching 0
"Name the base, divide by it; to reverse a %, divide — never subtract."
Connections
- Percentages — every cell above is one percentage of one base.
- Ratio and Proportion — profit% is the ratio Profit : CP written per 100.
- Linear Equations — Cells C, G, I are single-variable equations in disguise.
- Marked Price and Successive Discounts — extends Cell E to many discounts.
- Compound Interest — the "stacking" sibling of Cells F–I.
- Back to parent topic