Profit, loss and discount

Story hook

Imagine your uncle owns a tiny shop near your school. One morning he buys a box of 10 pencils from a big market for Rs 50. So each pencil cost him Rs 5.

Now he sells those pencils in his shop. He puts a price tag of Rs 8 on each one. A boy comes, likes a pencil, and pays Rs 8.

Stop and think. Your uncle paid Rs 5 for that pencil, but the boy gave him Rs 8. So your uncle kept Rs 3 extra. That little extra is called profit — the money a seller earns above what the thing cost him.

But shops are not always so lucky. Suppose the pencils got old and dusty and nobody wanted them at Rs 8. To clear them out, your uncle sells the last one for only Rs 4. He paid Rs 5 but got back only Rs 4 — he lost Rs 1. That shortfall is called a loss.

That is the whole story of buying and selling: sometimes a little extra (profit), sometimes a little short (loss). In this lesson we will learn exactly how to measure that extra or short amount, how to turn it into a percent, and how shop "SALE — 25% OFF" signs really work. We start from absolute zero. Stay relaxed and follow along.

Why this matters for UPSC

For your CSAT exam (UPSC Prelims Paper II):

• CSAT is a qualifying paper — you do not need a top score. You only need 33% (that is 66 marks out of 200) to pass. Profit-loss questions are among the most common and most predictable topics, so they are an easy, safe way to grab qualifying marks.
• Once you know the few simple formulas here, many questions become a 10–20 second plug-in. That is exactly the kind of quick, sure mark you want.

For real life (this is the fun part):

• When a shop says "Buy at Rs 600, was Rs 800", you will instantly know how much you saved.
• When you sell your old cycle or old phone, you will know whether you made a profit or a loss, and how much.
• When you help at a family shop or a school stall, you will be able to set a fair price.
• You will stop being fooled by big "50% + 20% extra off" signs that sound like 70% off but are not.

So this is not only an exam topic — it is everyday money sense. And it all grows out of one tiny idea: compare what you paid with what you got back. Let's begin.