In this section, the following topics are discussed with examples

  • Introduction
  • Types of Partnership
  • Simple Partnership 
  • Compound Partnership


Profit , Loss and Discount is a well known concept that is based on the concept percentages completely. We generally use this context of profit loss and discount in each and every part and parcel of our life. Time and again we have this PLD but till date we dont know the exact terms of it to be well said.

There are two types of partners.

  1. Passive Partner: Sleeping partner is the person who provides only investment but does not take part in running the business.
  2. Active Partner: Working partner is the person who not only invests the money but also takes part in running the business. For this work he is paid some salary or some percent of profit in addition.

Understanding the terms of PLD :

As usual lets start with an example, Consider that you are owing a denim company,

1. So to produce a denim you need capital, work force, transportation, material etc…. Now all this comprise together is called as COST PRICE we generally tell it as C.P.

2. Now you take it to the outlet and sell it with a tag on it and that is called as the TAG PRICE OR MARKED PRICE ( M.P.).

3. That rise in the price of the product from the cost price to the marked price is called as MARKUP PERCENTAGE (M.P. %).

MARKUP PERCENTAGE (M.P. %) = [(M.P. – C.P.) / C.P.] x 100 %

4. As a customer, When we enter into that outlet, We will generally look for products with high price reduction from the price that has been printed in the tag of the product. If not we would demand or bargain for some reduction in the given amount. That amount which being reduced by the shopkeeper is called as DISCOUNT. (Dis)

Dis = S.P. – M.P.

Dis % = [(S.P. – M.P.) / M.P.] x 100 %

5. The amount which you spend on a product, from the perspective of a customer, to buy it then that amount is called as SELLING PRICE ( S.P. ).

If we want to know about this Selling Price we have to understand two more concepts called as Profit and Loss.


For every product there will be cost price which cant be changed once if it is fixed but for any product if the price of the product is some value high than the cost price if that value adds on to the pocket of the seller and that is called as PROFIT ( P ).


If there is a situation in which the product sold for an amount less than the cost price of the product, then the seller of that product should spare that deficit amount from his pocket and that situation is called as LOSS.

Now lets see the formula for all this

S.P. = C.P. + P (or) C.P. – L

P % (or) L % = [(S.P. – C.P.) / C.P. ] x 100%

NOTE: Normally , for Loss another new formula will be given but we dont. If the answer of above formula is positive then it is PROFIT , else if it is negative it is LOSS.

So profit is nothing but P = S.P. – C.P.

P % = [(S.P. – C.P.) / C.P. ] x 100%


This is all about profit loss and discount lets look at few example problems and lets work on exercises.

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Example 1 :

If by selling an article for RS.100, a man gains Rs.15 then his gain percent is


S.P. = 100

P = 15

To find the profit or gain % we must know the cost price of the article

That is,

C.P. = S.P. – P

= 100 – 15 = 85.

.`. P % [(100 – 85) / 85 ] x 100%= 17 (11/17) %

Example 2:

If a merchant offers a discount of 40% on the marked price of his goods and thus ends up selling at cost price, what was the % mark up?

  1. 28.57%
  2. 40%
  3. 66.66%
  4. 58.33%



Considering that 100 rps is the marked value then selling price would be 60rps.

Now looking at the mark price from the selling price we have a difference of 40 rps so what percent of your selling price is 40?

Mark up % = 40 / 60 x 100

= 66.66 %.



Example 3:

A cow and horse are bought for Rs.2,00,000. The cow is sold at a profit of 20% and the horse is sold a t a loss of 10%. The overall gain is Rs.4000, the Cost price of cow?

a. 130000 b. 80000 c. 70000 d. 120000


Ans : (b)




(120/100)x + (90/100)y = 200000+4000

(12/10)x + 9/10(200000 – x) = 204000

3x= 2040000 – 1800000

x= 204000/3 = Rs.80,000

Example 4:

A shopkeeper marks his sarees at 20% above the cost price and allows the purchaser a discount of 10% for cash buying. What profit per cent does he make?

a) 18          

b) 12

c) 1

d) 8


Ans : d


Let the CP of saree = 100.; then Marked price = 120

:. SP = 120 – 10% of 120 = 120 – 12 = 108. So, profit = 8

:. Profit percent = 8%.