A car dealer bought a used car for ₦270,000 and spent ₦70,000 to refurbish it. He later sold the car for ₦490,000. What was the percentage profit?

Answer Details

To find the percentage profit, you first need to calculate two things:

• The total cost (how much the dealer spent altogether)
• The profit (how much more money he got from selling than he spent)

Step 1: Calculate the total cost.
The dealer bought the car for ₦270,000 and spent ₦70,000 to refurbish it.
So, the total cost is:

\[ \text{Total Cost} = 270,000 + 70,000 = 340,000 \]

Step 2: Calculate the profit.
He sold the car for ₦490,000. Profit is the amount received from selling minus the total cost:

\[ \text{Profit} = 490,000 - 340,000 = 150,000 \]

Step 3: Calculate the percentage profit.
Percentage profit is found by dividing the profit by the total cost and then multiplying by 100 to get a percentage:

\[ \text{Percentage Profit} = \frac{\text{Profit}}{\text{Total Cost}} \times 100 \] \[ \text{Percentage Profit} = \frac{150,000}{340,000} \times 100 \]

Step 4: Work out the percentage:

\[ \frac{150,000}{340,000} = 0.4412 \] \[ 0.4412 \times 100 = 44.12\% \]

Therefore, the percentage profit is approximately 45%.

Key Points:

• Percentage profit is always calculated on the total amount spent (cost price), not on the selling price.
• It's important to include both the purchase price and the refurbishment cost in the total cost before finding the profit.