Simple profit or loss on the sale of an item is calculated by subtracting the buying price from the sale price.

Changing this into a percentage profit or loss allows you to compare sales.

Is it better to buy a pencil for 5p and sell it for 10p, or to buy a house for

£200 000 and sell it for £210 000?

The answer is debatable, however buying a pencil for 5p and selling it for 10p represents a 100% profit compared to just a 5% profit on the house.

We use these formulae to work out percentage profits or losses.

**Example**

A bar of chocolate is bought for £1.50 and sold for £1.75. Calculate the percentage profit.

**Answer**

Don't mix your units, so

Actual profit = 25p and starting figure = 150

or

Actual profit = £0.25 and starting figure = £1.50

Percentage Profit = 16.7 % (3 s.f)