Question

If a lot was purchased for $20,000 and sold for $18,000, the percentage of loss is:

a) 10%
b) 5%
c) 8%
d) 20%

Answer 1

The percentage of loss when a lot purchased for $20,000 is sold for $18,000 is 10%, calculated by the formula (Loss / Purchase Price) × 100.

Step-by-step explanation:

To calculate the percentage of loss when a lot is purchased for $20,000 and sold for $18,000, we determine the difference in price and then calculate what percentage this difference is of the initial purchase price. The difference (or loss) here is $2,000 ($20,000 - $18,000).

The formula to calculate the percentage of loss is (Loss / Purchase Price) × 100. So, the calculation will be: ($2,000 / $20,000) × 100 = 10%. Therefore, the percentage of loss is 10%.