Positive and Negative Numbers (Economics)

Positive and Negative numbers

See Positive and Negative Numbers for a reminder about positive and negative numbers.

Worked Example

Example

Suppose that a hairdressing salon wants to know the total profit (or loss) that it made last year. The company made a profit of $£1,800$ in January, $£1,532$ in February, $£270$ in April, $£2,001$ in June, $£1,295$ in July, $£2,010$ in September, $£3,344$ in October and $£4,780$ in December. In March and May the salon made a loss of $£35$, while in August and November they broke even. How much profit (or loss) did the salon make last year?

Solution

To determine the total profit (or loss) made by the salon, we must add the profits (or losses) made by the salon each month. A profit is denoted by a positive number and a loss is denoted by a negative number, so we have:

\begin{align} \text{Total profit }&= 1800+1532+(-35)+270+(-35)+2001+1295+0+2010+3344+0+4780\\ &=1800+1532-35+270-35+2001+1295+0+2010+3344+0+4780\\ &=16,962 \end{align}

So the salon made a profit of £16,962 last year.

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