## Percentage of Profit Calculator

Percentage of Profit <a href="https://studysaga.in/calculator-studysaga/">Calculator</a>

# Percentage of Profit Calculator

Percentage of Profit is a financial term that describes the amount of profit earned on an investment relative to the initial cost of the investment. It is usually expressed as a percentage of the original investment. This concept is commonly used in finance and business to measure the profitability of an investment.

The formula to calculate the Percentage of Profit is:

Percentage of Profit = (Profit / Cost Price) x 100%

Where Profit is the amount of money earned as a result of an investment and Cost Price is the original cost of the investment.

Let’s take an example to understand the concept better.

Suppose a person buys a stock for \$100 and later sells it for \$120. The profit earned on this investment is \$20.

To calculate the Percentage of Profit, we will use the above formula:

Percentage of Profit = (Profit / Cost Price) x 100% = (20 / 100) x 100% = 20%

Therefore, the Percentage of Profit earned on this investment is 20%.

Similarly, let’s take another example:

Suppose a person buys a bike for \$2000 and later sells it for \$2500. The profit earned on this investment is \$500.

To calculate the Percentage of Profit, we will use the above formula:

Percentage of Profit = (Profit / Cost Price) x 100% = (500 / 2000) x 100% = 25%

Therefore, the Percentage of Profit earned on this investment is 25%.

Percentage of Profit is an important concept for investors and businesses. It helps them to measure the return on their investment and make informed decisions. In addition, it is also used to compare the profitability of different investments.

For instance, if an investor has two investment options, and one option offers a higher Percentage of Profit, then the investor can choose that option as it would be more profitable.

Here are some examples of percentage of profit calculations:

Example 1: Suppose a shopkeeper bought a product for \$50 and sold it for \$70. What is the percentage of profit earned by the shopkeeper? Solution: Profit earned = Selling price – Cost price = \$70 – \$50 = \$20 Percentage of profit = (Profit earned / Cost price) x 100% = (20 / 50) x 100% = 40% Therefore, the shopkeeper earned a profit of 40%.

Example 2: A company invested \$500,000 in a project and earned a profit of \$150,000. What is the percentage of profit earned by the company? Solution: Profit earned = \$150,000 Percentage of profit = (Profit earned / Investment) x 100% = (150,000 / 500,000) x 100% = 30% Therefore, the company earned a profit of 30%.

Example 3: Suppose a person bought a share for \$100 and sold it for \$125. What is the percentage of profit earned? Solution: Profit earned = Selling price – Cost price = \$125 – \$100 = \$25 Percentage of profit = (Profit earned / Cost price) x 100% = (25 / 100) x 100% = 25% Therefore, the person earned a profit of 25%.

Example 4: A company invested \$2 million in a project and earned a profit of \$500,000. What is the percentage of profit earned? Solution: Profit earned = \$500,000 Percentage of profit = (Profit earned / Investment) x 100% = (500,000 / 2,000,000) x 100% = 25% Therefore, the company earned a profit of 25%.

Here are more examples

Example 1: A shopkeeper buys a product for \$100 and sells it for \$120. What is the percentage of profit? Solution: Profit = Selling price – Cost price Profit = \$120 – \$100 = \$20 Profit percentage = (Profit / Cost price) x 100 Profit percentage = (20 / 100) x 100 = 20% Therefore, the shopkeeper made a profit of 20%.

Example 2: A company produces a product at a cost of \$500 and sells it for \$700. What is the percentage of profit? Solution: Profit = Selling price – Cost price Profit = \$700 – \$500 = \$200 Profit percentage = (Profit / Cost price) x 100 Profit percentage = (200 / 500) x 100 = 40% Therefore, the company made a profit of 40%.

Example 3: A person bought a share for \$50 and sold it for \$60. What is the percentage of profit? Solution: Profit = Selling price – Cost price Profit = \$60 – \$50 = \$10 Profit percentage = (Profit / Cost price) x 100 Profit percentage = (10 / 50) x 100 = 20% Therefore, the person made a profit of 20%.

Example 4: A store bought a product for \$200 and sold it for \$180. What is the percentage of loss? Solution: Loss = Cost price – Selling price Loss = \$200 – \$180 = \$20 Loss percentage = (Loss / Cost price) x 100 Loss percentage = (20 / 200) x 100 = 10% Therefore, the store incurred a loss of 10%.

Example 5: A company sold a product for \$1000, which cost them \$1200 to produce. What is the percentage of loss? Solution: Loss = Cost price – Selling price Loss = \$1200 – \$1000 = \$200 Loss percentage = (Loss / Cost price) x 100 Loss percentage = (200 / 1200) x 100 = 16.67% Therefore, the company incurred a loss of 16.67%.

In conclusion, Percentage of Profit is a useful tool to measure the profitability of an investment. It is a simple and easy-to-understand concept that is widely used in finance and business.