Profit, Loss & Discount MCQs for UPSC Prelims

39 practice questions on Profit, Loss & Discount from the Quantitative Aptitude section of the UPSC Prelims syllabus. 39 come with a written explanation and 8 are actual previous year questions. Try the sample set below - the answer stays hidden until you ask for it.

13 Easy 23 Medium 3 Hard 8 from past papers

Sample questions

Q1
Previous year question medium

What percent of water must be mixed with honey so as to gain 20% by selling the mixture at the cost price of honey?

  1. A 20%
  2. B 10%
  3. C 5%
  4. D 4%
Show answer and explanation

Correct answer: A - 20%

Let honey cost Rs. 1 per litre and take 1 litre of honey mixed with w litres of free water. Cost price = Rs. 1. Selling the whole mixture at the cost price of honey gives revenue = (1 + w) x 1. Profit = w on a cost of 1, and we need a 20% gain, so w = 0.20. Water added is 20% of the honey. Hence 20%.

Q2
Previous year question easy

Rakesh had money to buy 8 mobile handsets of a specific company. But the retailer offered very good discount on that particular handset. Rakesh could buy 10 mobile handsets with the amount he had. What was the discount the retailer offered?

  1. A 15%
  2. B 20%
  3. C 25%
  4. D 30%
Show answer and explanation

Correct answer: B - 20%

Let the original price of one handset be P. Rakesh's money = 8P. After the discount, the new price d lets him buy 10 handsets: 8P = 10d, so d = 0.8P. The discount per handset = P - 0.8P = 0.2P, which is 20% of the original price. Answer (b) 20%.

Q3
Previous year question medium

A shop owner offers the following discount options on an article to a customer: 1. Successive discounts of 10% and 20%, and then pay a service tax of 10%. 2. Successive discounts of 20% and 10%, and then pay a service tax of 10%. 3. Pay a service tax of 10% first, then successive discounts of 20% and 10%. Which one of the following is correct?

  1. A 1 only is the best option for the customer.
  2. B 2 only is the best option for the customer.
  3. C 3 only is the best option for the customer.
  4. D All the options are equally good for the customer.
Show answer and explanation

Correct answer: D - All the options are equally good for the customer.

In every option the final price is the marked price multiplied by the same three factors: a 10% discount factor (0.9), a 20% discount factor (0.8) and a 10% service-tax factor (1.1). Since multiplication is commutative, the order does not matter: 0.9 x 0.8 x 1.1 = 0.792 of the marked price in all three cases. Therefore all options give the customer the same final price and are equally good.

Q4
Previous year question easy

If Sohan, while selling two goats at the same price, makes a profit of 10% on one goat and suffers a loss of 10% on the other

  1. A he makes no profit and no loss.
  2. B he makes a profit of 1%.
  3. C he suffers a loss of 1%.
  4. D he suffers a loss of 2%.
Show answer and explanation

Correct answer: C - he suffers a loss of 1%.

When two items are sold at the same price, one at a gain of x% and the other at a loss of x%, there is always a net loss of (x/10)^2 percent. Here x = 10, so the loss = (10/10)^2 = 1%.

Q5
Previous year question medium

Gopal bought a cell phone and sold it to Ram at 10% profit. Then Ram wanted to sell it back to Gopal at 10% loss. What will be Gopal's position if he agreed?

  1. A Neither loss nor gain
  2. B Loss 1%
  3. C Gain 1%
  4. D Gain 0.5%
Show answer and explanation

Correct answer: B - Loss 1%

Let Gopal's original cost be Rs. 100. He sells to Ram at 10% profit, so Ram's purchase price = Rs. 110. Ram then sells it back at a 10% loss on Rs. 110, i.e. 110 - 11 = Rs. 99, which Gopal pays. So Gopal's effective cost price for the phone he ends up holding is Rs. 99, against an original value of Rs. 100, a difference of Rs. 1 on Rs. 100 = 1% loss. Hence (b) Loss 1%.

Q6
Previous year question easy

A person allows a 10% discount for cash payment from the marked price of a toy and still he makes a 10% gain. What is the cost price of the toy which is marked Rs. 770?

  1. A Rs. 610
  2. B Rs. 620
  3. C Rs. 630
  4. D Rs. 640
Show answer and explanation

Correct answer: C - Rs. 630

Marked price = Rs. 770. A 10% discount gives selling price = 770 x 0.90 = Rs. 693. This selling price represents a 10% gain over cost, so cost price x 1.10 = 693, giving cost price = 693 / 1.10 = Rs. 630. Check: 630 x 1.10 = 693, and 693 is 90% of 770, both consistent. The other options do not satisfy both the 10% discount and 10% profit conditions. Hence Rs. 630.

Q7
Previous year question easy

A person bought a car and sold it for Rs. 3,00,000. If he incurred a loss of 20%, then how much did he spend to buy the car?

  1. A Rs. 3,60,000
  2. B Rs. 3,65,000
  3. C Rs. 3,70,000
  4. D Rs. 3,75,000
Show answer and explanation

Correct answer: D - Rs. 3,75,000

A 20% loss means the selling price is 80% of the cost price: SP = 0.8 x CP. So CP = SP / 0.8 = 3,00,000 / 0.8 = 3,75,000. The person spent Rs. 3,75,000 to buy the car.

Q8
Previous year question medium

A shopkeeper sells an article at Rs. 40 and gets X% profit. However, when he sells it at Rs. 20, he faces same percentage of loss. What is the original cost of the article?

  1. A Rs. 10
  2. B Rs. 20
  3. C Rs. 30
  4. D Rs. 40
Show answer and explanation

Correct answer: C - Rs. 30

Let the cost price be C. Selling at Rs. 40 gives X% profit: 40 = C(1 + X/100). Selling at Rs. 20 gives X% loss: 20 = C(1 - X/100). Adding the two equations: 40 + 20 = 2C, so 2C = 60 and C = 30. (When the profit percentage equals the loss percentage, the cost price is simply the average of the two selling prices, (40 + 20)/2 = 30.) Checking: profit Rs. 10 on Rs. 30 is 33.33%, and loss Rs. 10 on Rs. 30 is also 33.33%, confirming X = 33.33. Hence (c) Rs. 30 is correct; the other options do not satisfy equal profit and loss percentages.

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More Quantitative Aptitude topics

Number System 188 Permutation, Combination & Probability 94 Percentage 85 Geometry & Mensuration 69 Time, Speed & Distance 66 Algebra 66 Basic Numeracy & Word Problems 66 Ratio & Proportion 60 Clocks & Calendars 56 Sequences & Series 56 Mixtures & Alligation 52 Time & Work 51 Averages 45 Simple & Compound Interest 43 Ages 33