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?
- A.Neither loss nor gain
- B.Loss 1%
- C.Gain 1%
- D.Gain 0.5%
▶ Answer & Explanation
Correct answer: C. Gain 1%
Let the cost price for Gopal be Rs. 100. He sells it to Ram for Rs. 110 (10% profit). Ram then sells it back to Gopal at a 10% loss on Rs. 110, which is Rs. 110 - (10/100)*110 = Rs. 99. Gopal buys it back for Rs. 99. So, Gopal's net transaction: he spent Rs. 100 initially and then spent Rs. 99 to buy it back, totaling Rs. 199. He received Rs. 110 from Ram. His final cost price is effectively Rs. 100 (original purchase). He sold it for Rs. 110 and bought it back for Rs. 99. His net gain is the difference between the selling price and the buy-back price, which is Rs. 110 - Rs. 99 = Rs. 11. However, considering the overall profit/loss from his initial investment, he bought at 100, sold at 110. Then bought back at 99. The net result is that he has the phone and has gained Rs. 1 (Rs. 110 received - Rs. 99 paid back for the phone). Compared to his initial Rs. 100 cost, this Rs. 1 gain is a 1% gain.
Source: UPSC csat 2017