Ramaiah purchased an item for Rs. 10,000  and sold it at the gain of 40%. From that amount, he purchased another item and sold it at the loss of 25%. What is his overall gain/loss ?

Given:

Purchase price = ₹10,000

Gain on first item = 40%

Loss on second item = 25%

Formula used:

Selling Price (SP) = Cost Price (CP) + Gain (or - Loss)

Gain/Loss % = (Gain or Loss / CP) × 100

Calculations:

First item:

Gain = 40% of ₹10,000

⇒ Gain = (40/100) × 10,000

⇒ Gain = ₹4,000

Selling Price of first item = ₹10,000 + ₹4,000 = ₹14,000

Second item:

Loss = 25% of ₹14,000

⇒ Loss = (25/100) × 14,000

⇒ Loss = ₹3,500

Selling Price of second item = ₹14,000 - ₹3,500

⇒ SP = ₹10,500

Overall Gain/Loss:

Total CP = ₹10,000

Total SP = ₹10,500

⇒ Overall Gain = ₹10,500 - ₹10,000

⇒ Overall Gain = ₹500

∴ The correct answer is option (2).