A man buys a tractor for ₹4,00,000 and spends ₹50,000 on its repairs. He sells it for ₹5,55,000. What is the gain percentage? (Rounded off to two decimal places)
- AOption (a)
24.24%
- BOption (b)
21.22%
- COption (c)
23.33%
- DOption (d)
22.22%
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Correct answer
23.33%
Why this answer is correct
Shortcut Trick
Effective CP = 400 + 50 = 450 (in thousands).
SP = 555 (in thousands).
Profit = 555 − 450 = 105.
Gain % = (105 / 450) × 100 = (7 / 30) × 100 = 23.33%.
∴ The correct answer is 23.33%.
Alternate Method
Given:
Purchase price of Tractor = ₹4,00,000
Amount spent on Repairs = ₹50,000
Selling Price (SP) = ₹5,55,000
Formula Used:
Total Cost Price (CP) = Purchase Price + Overhead Expenses
Gain = SP − CP
Gain Percentage = (Gain / CP) × 100
Calculations:
⇒ Total Cost Price (CP) = 4,00,000 + 50,000 = ₹4,50,000
⇒ Gain = 5,55,000 − 4,50,000 = ₹1,05,000
⇒ Gain % = (1,05,000 / 4,50,000) × 100
⇒ Gain % = (105 / 450) × 100
⇒ Gain % = (7 / 30) × 100
⇒ Gain % = 70 / 3 = 23.3333...
Rounding off to two decimal places, we get 23.33%.
∴ The correct answer is 23.33%.
Additional Information
Total Cost Price
When extra expenses like Repairs, Transportation, or Installation are incurred on an item, they must be added to the purchase price to find the actual Effective Cost Price.
Profit and Loss Percentage
Profit or Loss is always calculated on the Cost Price (CP) unless stated otherwise. Gain % = (SP − CP) / CP × 100.
Rounding Rule
For Rounding off to two decimal places, if the third decimal digit is 5 or more, increase the second digit by 1; otherwise, leave it unchanged.