Mr. Rajesh buys a toy for Rs. 27.50 and sells it for Rs. 28.60. What is his percentage gain on this transaction?

Introduction / Context:
This is a straightforward profit percentage question. The cost price and selling price of a single toy are given, and we are asked to compute the percentage gain. Such problems are basic building blocks in the profit and loss chapter and test the candidate's ability to apply the standard profit formula accurately with decimal values.

Given Data / Assumptions:

• Cost price (CP) of the toy = Rs. 27.50.
• Selling price (SP) of the toy = Rs. 28.60.
• We assume there are no additional costs such as tax, transport, or commission.
• We need to find profit percentage based on the cost price.

Concept / Approach:
The profit on an article is SP − CP. The profit percentage is then calculated as (Profit / CP) * 100. Here, dealing with decimals is unavoidable, but the numbers are simple enough to compute mentally or with a few careful steps. Keeping track of place values is important to avoid minor calculation errors when subtracting and dividing.

Step-by-Step Solution:
Cost price CP = Rs. 27.50.Selling price SP = Rs. 28.60.Profit = SP − CP = 28.60 − 27.50.Profit = Rs. 1.10.Profit percentage = (Profit / CP) * 100.So profit percentage = (1.10 / 27.50) * 100.Compute 1.10 / 27.50 = 0.04.Therefore, profit percentage = 0.04 * 100 = 4%.

Verification / Alternative check:
Note that 27.50 * 4% = 27.50 * 0.04 = 1.10, which exactly matches the profit.Alternatively, observe that 1.10 is 1.1 out of 27.5, and 1.1:27.5 is the same as 11:275, which reduces to 1:25. Thus, 1/25 is 4%.This confirms that the computed profit percentage is correct.

Why Other Options Are Wrong:
5% would require a profit of 0.05 * 27.50 = Rs. 1.375, which is not equal to Rs. 1.10.6% would require profit of 0.06 * 27.50 = Rs. 1.65, too large.3% would require profit of 0.03 * 27.50 = Rs. 0.825, too small.Only 4% exactly matches the actual profit of Rs. 1.10.

Common Pitfalls:
A common issue is misplacing the decimal when subtracting 27.50 from 28.60.Another mistake is using selling price instead of cost price in the denominator while calculating profit percentage.Some learners may approximate too early, leading to rounding errors that push them towards an incorrect option.

Final Answer:
Mr. Rajesh's percentage gain on the toy is 4%.