Ram purchases two watches for Rs. 3,500. By selling one watch at a profit of 25 percent and the other at a loss of 10 percent he neither earns profit nor suffers loss in the whole transaction. What is the cost price of each watch?

Given:

Ram purchases two watches for Rs. 3,500.

Selling one watch at a profit of 25 percent and the other at a loss of 10 percent, he neither earns profit nor suffers loss in the whole transaction.

Formula:

Selling price = Cost price + Profit or - Loss

Solution:

Let's assume the cost price of the first watch to be x and the cost price of the second watch to be (3500 - x), since the total cost price is Rs. 3,500.

The selling price of the first watch will be 1.25x (i.e., a 25% profit on the cost price) and the selling price of the second watch will be 0.9(3500 - x) (i.e., a 10% loss on the cost price).

Since there is no profit or loss in the whole transaction, the total selling price should be equal to the total cost price. That is,

1.25x + 0.9(3500 - x) = 3500

Simplifying the equation, we get:

1.25x + 3150 - 0.9x = 3500

0.35x = 350

x = 1000

Therefore, the cost price of the first watch is Rs. 1000 and the cost price of the second watch is Rs. 2500.