Ramesh gets a profit of 20% in one trade and suffers a loss of 20% in the second when he sells 2 cycles for Rs. 4000 each. What is his profit or loss in the entire trade?
A)loss = 4%
B)loss = 16%
C)profit = 16%
D)profit = 4%

Question

Quizplus · Accepted Answer

When Ramesh sells two cycles for Rs. 4000 each, the total selling price is Rs. 8000. A 20% profit on one trade and a 20% loss on another do not cancel each other out due to the difference in base amounts for calculating profit and loss. The effective loss can be calculated using the formula for successive percentage changes: $Effective\ Change = a + b + \frac{ab}{100}$, where $a = 20$ (profit percentage) and $b = -20$ (loss percentage). Substituting these values, we get $Effective\ Change = 20 - 20 + \frac{(20)(-20)}{100} = 0 - 4 = -4%$, indicating a 4% loss overall.

Ramesh Gets a Profit of 20% in One Trade and Suffers