A vendor earns 10% on an investment but loses 10% on another investment. What will be the combined loss or gain if the two investments are in the ratio 1 : 3?
Show answer & explanation
Correct answer: D
Explanation
The correct answer is option 4 i.e. 5% loss.
The ratio of the Two investments = 1 : 3
Total investment = 4
Profit on 1st investment = 10%
So, profit = 10% of 1 = 0.1
Loss on the second investment = 10% of 3 = 0.3
Overall loss = 0.3 - 0.1 = 0.2
% loss = Total loss/Total investment × 100
= (0.2/4) × 100
= 5%