Some questions in the exam will use scenarios that may involve financial transactions. While words like ‘profit’ may be explained to you, it’s best to understand financial maths before going into the exam.

This is so that if you are presented with such questions, you can save time and get straight into formulating your calculations, rather than to sit there and try to grasp the concept of ‘profit’.

Savings and Profit

• Profit is when money in > money out. So, what you get is ‘leftover’ money. For example, if you run a lemonade stand and you sell $100 of lemonade on one day and it costs you $50 for all the ingredients to make the lemonade, you’ve made $50 profit (that’s the money ‘left over’).
• A loss is when money in < money out. So, what you get is money that you owe. For example, if you agreed to pay someone $50 to sell lemonade at your one-time lemonade stand, and the stand only made $30 dollars that day, you owe that someone $20.
• Savings is when money that is supposed to go out > money that actually went out. So, what you get is money saved. For example, you were going to buy a sweater for $40. They have a sale of 25% off. You actually pay $30 and so you have ‘saved’ $10.

How to answer these types of questions

To answer ‘profit’ or ‘loss’ questions, you need to find the difference between two pieces of information.

• Step One - Buying—You spend $100 buying 10 pairs of sunglasses. Therefore, the sunglasses are $10 each.
• Step Two - Selling—You sell the sunglasses at $15 each.
• Step Three - The Difference—You've made $5 for every sunglasses set that you have sold ($15 sales price less $10 bought price). Assuming that you've sold 10, you've made a profit of $50 (10 sunglasses x $5 profit).

Similar to profit and loss questions, to answer ‘savings’ questions, you need to find the difference between two pieces of information.

• Step One – Original Price—10 pairs of sunglasses are $100 originally. Therefore the sunglasses are $10 each.
• Step Two – Discounted Price —There is a 20% discount on. 20% of $10 is $2, so each sunglass is $8 ($10-$2). 10 sunglasses = $80 with the discount.
• Step Three - Savings—You've saved $2 for every sunglass you bought on discount ($10 original price less $8 bought price). Assuming that you've bought 10, you've saved $20 (10 sunglasses x $2 savings).

Example Question/s

Watch video for explanation of the following question/s:

Zilla buys a phone that is marked 60% off. If she pays $200, what was its original price?

Adam buys 10 oranges for $2. At what price should he sell each orange if he wishes to make a profit of 25%?

Key rules to remember

• Profit is when money in > money out.
• Loss is when money in < money out.
• Savings is when money that is supposed to go out > money that actually went out.

Practice time!

Now, it's your turn to practice.

Click on the button below and start your practice questions. We recommend doing untimed mode first, and then, when you're ready, do timed mode.

Every question has two solutions videos after you complete the question. The first is a quick 60 second video that shows you how our expert answers the question quickly. The second video is a more in-depth 5-steps or less explainer video that shows you the steps to take to answer the question. It's really important that you review the second video because that's where you'll learn additional tips and tricks.

Once you're done with the practice questions, move on to the next checkpoint.

Now, let’s get started on your practice questions.