Selling Price Formula

The selling price formula is used to calculate the selling price, which is the price at which a product is sold. If we compare the selling price and the cost price of any article, we can find the profit or loss incurred in the transaction. There are different formulas with the help of which the selling price can be calculated. Let us understand the different selling price formulas in the lesson.

What is the Selling Price Formula?

The basic formula that is used to calculate the selling price of a product is: Selling price (S.P.) = Cost Price (C.P.) + Profit. Selling price can be calculated by using different formulas. In order to understand the other formulas, we need to know the terms related to them.

Cost Price (C.P.): Cost price is the price at which a product is purchased.

Profit (Gain): Profit is the amount that is gained or earned in the transaction. In other words, if the selling price is greater than the cost price, then the difference between them is called profit.

Loss: Loss is the amount that is lost in the transaction. This means if the selling price is less than the cost price, then the difference between them is called loss.

Formula 1: Selling Price Formula = {(100 + Gain%)/100} × CP

If we observe the first formula, we see that when the Cost price and gain percentage is given, we can easily calculate the selling price.

Example: If the cost price of an article is $40 and there is a gain of 20% in the transaction, find its selling price.

Substituting the given values in the formula: Selling Price = {(100 + Gain%)/100} × CP = {(100 + 20)/100} × 40 = (120/100) × 40 = 48. Therefore, the Selling price of the article is $48.

Formula 2: Selling Price Formula = {(100 – Loss%)/100} × CP

If we observe the second formula, we see that when the Cost price and loss percentage is given we can calculate the selling price.

Example: If the cost price of an article is $30 and there is a loss of 10% when it is sold, find the selling price.

Substituting the given values in the formula: Selling Price = {(100 – Loss%)/100} × CP = {(100 – 10)/100} × 30 = 27. Therefore, the Selling price of the article is $27.

Formula 3: Selling Price Formula = CP + Profit

If we observe the third formula, we see that when the Cost price and profit ($) is given we can calculate the selling price.

Example: If the cost price of an article is $25 and it is sold at a profit of $5, find the selling price.

Substituting the given values in the formula: Selling Price = CP + Profit = 25 + 5 = 30. Therefore, the Selling price of the article is $30.

Formula 4: Selling Price Formula = CP – Loss

In the fourth formula, we see that when the cost price and loss ($) is given we can find the selling price.

Example: If the cost price of an article is $35 and it is sold at a loss of $3, find the selling price.

Substituting the given values in the formula: Selling Price = CP - loss = 35 - 3 = 32. Therefore, the Selling price of the article is $32.

Difference Between Selling Price and Marked Price

In order to be at par with the competition in business and to increase the sale of goods, shopkeepers offer some rebates to customers. It should be noted that there are two more terms related to this concept - the marked price (list price), and discount. Marked price is a price on which the seller offers a discount. After the discount is applied to the Marked price, it is sold at a reduced price known as the selling price.

Marked price: Marked price is the price set by the seller on the label of the article.

Discount: The rebate given by the shopkeepers to attract the customers is called a discount. Discount is always calculated on the Marked price of the article.

Therefore, we have another formula to calculate the selling price:

Selling Price = Marked Price - Discount.

Example: If the marked price of an article is $300, and there is a 20% discount on it, find the price at which it is sold.

In this case, there is a 20% discount on the marked price.

20% discount on marked price = (20/100) × 300

Discount ($)= 6000/100 = $60

Now, using the selling price formula, Selling Price = Marked Price - Discount ($) = $300 − $60 = $240. Therefore, the selling price of the article is $240.

Let us have a look at a few more solved examples to understand the selling price formula better.

Selling Price Formula Examples

Example1: Ryan buys a calculator for $720 and sells it at a loss of 6(2/3)%. Find the selling price of the calculator.

Solution: Given, CP= $720; Loss= 6(2/3)% =20/3%
Using the selling price formula,
SP = {(100 – Loss %)/100} × CP
Substituting the values,
SP = {(100-(20/3))/100} × 720
SP = {280/300} × 720
SP = $672

Answer: The selling price of the calculator is $672.

Example 2: James bought a bicycle for $600 and sold it at a profit of $100. Find the selling price of the bicycle.

Solution: Given, CP = $600, Profit = $100
Using the selling price formula,
SP = CP + Profit
Substituting the values,
SP = 600 + 100
SP = 700

Answer: The selling price of the bicycle is $700.

Example 3: If the marked price of an article is $400, and there is a 15% discount on it, find the selling price.
Solution:

In this case, there is a 15% discount on the marked price. 15% discount on marked price = (15/100) × 400 = 60

Discount ($)= 6000/100 = $60

Therefore, using the selling price formula, Selling Price = Marked Price - Discount ($) = $400 − $60 = $340

Answer: The selling price of the article is $340.