UPSC Prelims 2017 · CSAT
Question 20: Basic Numeracy
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?
AnswerUPSC’s answer is (c).
Let Gopal's cost be 100. He sells to Ram at 110. Ram sells back at a 10% loss: 110 x 0.9 = 99. Gopal buys the phone back at 99, which is 1 below his original cost of 100, a 1% gain measured on that cost. Remember that successive percentage changes on different bases do not cancel: +10% then -10% leaves -1%, not zero.
Why each option is right or wrong
- (a) Buying back at 99 against a cost of 100 leaves a difference of 1, not zero.
- (b) Gopal pays 99, which is below his original 100, so it is a gain, not a loss.
- (c) Correct: he takes the phone back at 99 against his original cost of 100, a 1% gain.
- (d) 0.5% does not arise anywhere in the working.
Worth knowing: The wording is ambiguous: counting his earlier sale at 110 as well, his cash gain is 11% of his cost; the key compares only the buy-back price with the original cost.
Answer: UPSC’s key. Explanation: written by UPSC Grade, not by UPSC.
Source: UPSC, Civil Services (Preliminary) Examination 2017, General Studies Paper II (CSAT), Series A. The paper on upsc.gov.in.