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CAT Questions | CAT Arithmetic Questions: Profit and Loss

Profit and Loss carry high importance in management entrance exams like CAT, XAT, NMAT. It is an integral part of the Arithmetic chapter, Data Interpretation and Logical Reasoning in these entrance exams. Prior understanding of ratios and percentages is a must to study this chapter. Students can expect at least 3-5 questions from Profit and Loss in every entrance exam. 

CAT Quantitative Aptitude questions | CAT Arithmetic: Profit and Loss

Below you will find Profit and Loss questions that came in previous years’ CAT papers.

  1. A person spent Rs 50000 to purchase a desktop computer and a laptop computer. He sold the desktop at 20% profit and the laptop at 10% loss. If overall he made a 2% profit then the purchase price, in rupees, of the desktop is ____________                                                                                                                                                                                                   [CAT 2020]

1. Answer:

D = Price of Desktop and L = Price of Laptop

0.2 D – 0.1 L = 2 % of 50000

0.2 D – 0.1 L = 1000

D – L = 10000

D + L = 50000

Solving D = 20000

2. Anil buys 12 toys and labels each with the same selling price. He sells 8 toys initially at 20% discount on the labeled price.             Then he sells the remaining 4 toys at an additional 25% discount on the discounted price. Thus, he gets a total of Rs 2112,           and makes a 10% profit. With no discounts, his percentage of profit would have been

             A) 60    B) 54    C) 55    D) 50                                                                                                      [CAT 2020]


2. Answer:

Let’s take Selling Price = P

= (8 × 0.8 P) + 4 × {0.8P – 1/4 (0.8) P}

= {(8 × 0.8 P) + 4 × (0.6P)}

Total Selling Price = 8.8 P

CP = 8.8P/1.1 = 8P (Since he makes 10% profit)

SP = 12P

So, Profit from 8P to 12P = 4P/8P = 50%

3. On selling a pen at 5% loss and a book at 15% gain, Karim gains Rs. 7. If he sells the pen at 5% gain and the book at 10%           gain, he gains Rs. 13. What is the cost price of the book in Rupees?

            A) 95    B) 100    C) 80    D) 85                                                                                                    [CAT 2019]


3. Answer:

let the CP of pen = p and that of book = b
So as per question 0.15 b – 0.05 p = 7
Or 15b – 5p = 700 ————-1)
Similarly 10b + 5p = 1300 —–2)
Adding both equations 25b = 2000
Or b = 2000/25 = 80

4. A wholesaler bought walnuts and peanuts, the price of walnut per kg being thrice that of peanut per kg. He then sold 8 kg of peanuts at a profit of 10% and 16 kg of walnuts at a profit of 20% to a shopkeeper. However, the shopkeeper lost 5 kg of walnuts and 3 kg of peanuts in transit. He then mixed the remaining nuts and sold the mixture at Rs. 166 per kg, thus making an overall profit of 25%. At what price, in Rs. per kg, did the wholesaler buy the walnuts?

           A) 98    B) 96    C) 84    D) 86                                                                                                         [CAT 2019]


4. Answer:

Let the cost price of peanuts for the wholesaler be x per kg.
Cost price of walnuts for the wholesaler is 3x per kg.
The wholesaler sold 8 kg of peanuts at 10% profit and 16 kg of walnuts at 20% profit to a shopkeeper.
Total cost price to the shopkeeper = (8)(x)(1.1) + 16(3x)(1.2) = 66.4x The shopkeeper lost 5 kg walnuts and 3 kg peanuts.
The shopkeeper sold the mixture of 11 kg walnuts and 5 kg peanuts. His total selling price=166(16) = 2656
His total cost price = 2656(100/125) = 2124.8
66.4x = 2124.8
x = 32
Price at which the wholesaler bought walnuts = 3x = 96/- per kg

Basic Concepts in Profit and Loss:

There are some set concepts or types on which questions are framed. A thorough understanding of each type of problem would help in tackling the exam. Questions based on Profit and Loss concepts in CAT, XAT, SNAP, NMAT, etc. are of the following type:

  1. Direct Formula based and Single Product: Straight formula-application based question. Different CP based: Questions based on buying a similar product at two different prices and selling them after clubbing at some other price.
  2. Equal Profit and Loss percentage – Same SP: Questions on selling two products at the same price but one at a loss of x% and the other at a gain of x%. The overall transaction will always lead to a loss.
  3. Consumption – Expenditure based: Effect of increase or decrease in expenditure on the quantity of the product consumed.
  4. Successive Profit/ Loss: Questions on successive selling and purchasing of a product at different profit or loss percentages. For example, when there is a profit of x% and then a loss of z% on selling an item, the net profit or loss percentage = (x+z+(xz/100)).
  5. Faulty Weights: This concept includes questions on the use of faulty weights by a shopkeeper or a wholesaler who uses those weights to measure the quantity.
  6. Marked price and Discount: Simple questions on discounts and MP of a product
  7. Ratios: One of the finest applications of Ratios and its concept is in Profit & Loss questions. These questions test the student’s fast calculation skills.

Preparation Phase for Profit and Loss:

Profit Loss questions forms the important part of Arithmetic which has good contribution in the Quants section of CAT, XAT, SNAP, NMAT and other various management entrance exams. We will divide the preparation of this topic into three levels following which can help the aspirants to score exceptionally well in the management entrance exams.

Level I:

  1. Learn Speed calculation: For an effective and quick calculation, be thorough with tables till 20, memorize squares till 30, and cubes till 15.
  2. Fraction – Percentage relation: For quick percentage calculation, memorize the fraction-percentage table. For example, 1/2 is 50%, 1/3 is 33.33%, and so on. It will help analyze discount, profit per cent, etc.
  3. Note down all the profit and loss formulas in this chapter and keep revising them.
  4. Practice beginner level problems on profit and loss like Mark-up and Discounts, Faulty weights, Expenditure – Consumption, and Successive Discounts. Follow MBAP CAT E-Book (Concept Theory) study material for this.
  5. Questions on Faulty weights are a bit tricky, hence need more emphasis. 

Level II:

  1. Move on to more complex problems, attempt beginner and intermediate level mock on concepts of Profit & Loss. You can use MBAP Live Lecture Recording (Basic) for understanding the concepts.
  2. Solve previous year Profit & Loss CAT questions and time yourself. Do not get stuck on one question and try to solve easy questions first.
  3. Keep attempting mocks to check your performance. Make use of MBAP Previous year CAT question paper.
  4. Topic-wise mocks, provided by MBAP, can be utilized to enhance your performance. Following this is very necessary to have a strong hold on Profit and Loss topic.

Level III:

  1. For advanced level preparation, start practicing profit and loss example questions from MBAP CAT E-book (Practice Questions).
  2. Questions here are categorized into Level of Difficulty (LOD), based upon your preparation level, start attempting 3 or 4 questions daily. Aspirants should also practice mocks and solve MBAP Previous year CAT paper questions for profit and loss questions with solutions.

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