Question: A merchant sells two articles for $500 each. If he makes a profit of 10% on one and a loss of 10% on the other, what is his overall profit or loss?

Options:

1. Loss of $5
2. Profit of $5
3. No profit no loss
4. Loss of $10

Correct Answer: Loss of $5

Solution:

Cost Price of first = 500/1.1 = 454.55, Selling Price = 500. Cost Price of second = 500/0.9 = 555.56, Selling Price = 500. Total Cost Price = 454.55 + 555.56 = 1010.11, Total Selling Price = 1000. Loss = 1010.11 - 1000 = 10.11.