A Shopkeeper Bought A Product For 1200 And Sold It At A Profit Of 20%. Find The Selling Price. Also, If The Buyer Paid 5% GST, Find The Final Price Paid.

Mar 9, 2025 by ADMIN 155 views

Calculating Selling Price and Final Price Paid: A Comprehensive Guide

In the world of commerce, calculating the selling price of a product is a crucial task for shopkeepers and business owners. It involves determining the amount at which the product should be sold to ensure a profit. Additionally, with the implementation of Goods and Services Tax (GST), the final price paid by the buyer also needs to be calculated. In this article, we will delve into the process of calculating the selling price and final price paid, considering a profit margin of 20% and a GST of 5%.

To calculate the selling price, we need to determine the cost price of the product and the desired profit margin. The cost price is the amount at which the shopkeeper buys the product, and the profit margin is the percentage of the cost price that the shopkeeper wants to earn as profit.

Cost Price and Profit Margin

In this scenario, the shopkeeper buys the product for ₹ 1200 and wants to earn a profit of 20%. To calculate the selling price, we can use the following formula:

Selling Price = Cost Price + (Cost Price x Profit Margin)

Substituting the values, we get:

Selling Price = 1200 + (1200 x 0.20) Selling Price = 1200 + 240 Selling Price = ₹ 1440

Therefore, the selling price of the product is ₹ 1440.

Now that we have calculated the selling price, we need to consider the GST of 5% that the buyer needs to pay. To calculate the final price paid, we can use the following formula:

Final Price Paid = Selling Price + (Selling Price x GST)

Substituting the values, we get:

Final Price Paid = 1440 + (1440 x 0.05) Final Price Paid = 1440 + 72 Final Price Paid = ₹ 1512

Therefore, the final price paid by the buyer is ₹ 1512.

In conclusion, calculating the selling price and final price paid is a crucial task for shopkeepers and business owners. By considering the cost price, profit margin, and GST, we can determine the selling price and final price paid. In this article, we have calculated the selling price of a product bought for ₹ 1200 and sold at a profit of 20%, and the final price paid by the buyer considering a GST of 5%.

The selling price of a product can be calculated by adding the cost price and the desired profit margin.
The final price paid by the buyer can be calculated by adding the selling price and the GST.
A profit margin of 20% and a GST of 5% can result in a final price paid of ₹ 1512.

The concepts of calculating selling price and final price paid have numerous real-world applications. For instance:

Business Owners: Calculating the selling price and final price paid is essential for business owners to determine their revenue and profit margins.
Shopkeepers: Shopkeepers need to calculate the selling price and final price paid to ensure they are earning a profit and to provide accurate information to their customers.
Tax Authorities: Tax authorities need to calculate the final price paid to determine the amount of GST to be collected.

**What is the selling price of a product bought for ₹ 1200 and sold at a profit of 20%?
- The selling price is ₹ 1440.
**What is the final price paid by the buyer considering a GST of 5%?
- The final price paid is ₹ 1512.
**How can I calculate the selling price and final price paid?
- You can use the formulas: Selling Price = Cost Price + (Cost Price x Profit Margin) and Final Price Paid = Selling Price + (Selling Price x GST).
  A Comprehensive Guide to Calculating Selling Price and Final Price Paid: Q&A

In our previous article, we discussed the importance of calculating the selling price and final price paid in the world of commerce. We also provided a step-by-step guide on how to calculate the selling price and final price paid, considering a profit margin of 20% and a GST of 5%. In this article, we will address some of the frequently asked questions related to calculating selling price and final price paid.

Q1: What is the selling price of a product bought for ₹ 1500 and sold at a profit of 25%?

A1: To calculate the selling price, we can use the formula: Selling Price = Cost Price + (Cost Price x Profit Margin). Substituting the values, we get:

Selling Price = 1500 + (1500 x 0.25) Selling Price = 1500 + 375 Selling Price = ₹ 1875

Q2: What is the final price paid by the buyer considering a GST of 8%?

A2: To calculate the final price paid, we can use the formula: Final Price Paid = Selling Price + (Selling Price x GST). Substituting the values, we get:

Final Price Paid = 1875 + (1875 x 0.08) Final Price Paid = 1875 + 150 Final Price Paid = ₹ 2025

Q3: How can I calculate the selling price and final price paid if the profit margin is 15% and the GST is 3%?

A3: To calculate the selling price, we can use the formula: Selling Price = Cost Price + (Cost Price x Profit Margin). To calculate the final price paid, we can use the formula: Final Price Paid = Selling Price + (Selling Price x GST). Substituting the values, we get:

Selling Price = Cost Price + (Cost Price x 0.15) Final Price Paid = Selling Price + (Selling Price x 0.03)

Q4: What is the difference between the selling price and the final price paid?

A4: The difference between the selling price and the final price paid is the amount of GST charged to the buyer. In the previous example, the selling price was ₹ 1875 and the final price paid was ₹ 2025. The difference is ₹ 150, which is the amount of GST charged to the buyer.

Q5: Can I calculate the selling price and final price paid if the cost price is not known?

A5: Yes, you can calculate the selling price and final price paid if the cost price is not known. However, you will need to know the selling price and the profit margin to calculate the cost price. Once you have the cost price, you can use the formulas to calculate the selling price and final price paid.

Q6: How can I calculate the profit margin if the selling price and cost price are known?

A6: To calculate the profit margin, you can use the formula: Profit Margin = (Selling Price - Cost Price) / Cost Price. Substituting the values, we get:

Profit Margin = (1875 - 1500) / 1500 Profit Margin = 375 / 1500 Profit Margin = 0.25 or 25%

In conclusion, calculating the selling price and final price paid is a crucial task for shopkeepers and business owners. By understanding the formulas and concepts discussed in this article, you can calculate the selling price and final price paid with ease. Remember to consider the profit margin and GST when calculating the selling price and final price paid.

The selling price of a product can be calculated by adding the cost price and the desired profit margin.
The final price paid by the buyer can be calculated by adding the selling price and the GST.
A profit margin of 25% and a GST of 8% can result in a final price paid of ₹ 2025.
The difference between the selling price and the final price paid is the amount of GST charged to the buyer.

The concepts of calculating selling price and final price paid have numerous real-world applications. For instance:

Business Owners: Calculating the selling price and final price paid is essential for business owners to determine their revenue and profit margins.
Shopkeepers: Shopkeepers need to calculate the selling price and final price paid to ensure they are earning a profit and to provide accurate information to their customers.
Tax Authorities: Tax authorities need to calculate the final price paid to determine the amount of GST to be collected.

**What is the selling price of a product bought for ₹ 1800 and sold at a profit of 30%?
- The selling price is ₹ 2340.
**What is the final price paid by the buyer considering a GST of 6%?
- The final price paid is ₹ 2484.
**How can I calculate the selling price and final price paid if the profit margin is 18% and the GST is 4%?
- You can use the formulas: Selling Price = Cost Price + (Cost Price x Profit Margin) and Final Price Paid = Selling Price + (Selling Price x GST).