MATHEMATIC

S
IN THE
MODERN
WORLD
D I S C O U N T
2
LESSON 7
DISCOUNT AND MARK-
UP
DISCOUN
T
╸ a deduction from the usual cost of
something, typically given for
prompt or advance payment or to
a special category of buyers.

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DISCOUN
T
╸ Original Price - The amount at
which an item is usually sold.
╸ Discount - The amount deducted
from the original price prior to
obtaining the selling price.

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 DISCOUN
T
╸ Discounted Price - The resulting reduced
amount from the amount of original price
due to some promotional scheme.
╸ Discount Rate - The percent value of the
discount as compared to the original price.

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 FORMUL
A
To get the discount
Discount = Discount Rate x Original Price
To get the discounted price
Discounted Price = Original Price - Discount
Discounted Price = Original Price - Discount Rate x Original Price
Discounted Price = Original Price x (1 - Discount Rate)
To get the discount rate
Discount Rate = Discounted Price / Original Price x 100
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 Procedure to Find Discount
╸ The rate is usually given as a percentage
value.
╸ To find the discount, we have to multiply
the rate by the original price.
╸ To find the sale price, we have to subtract
the discount from the original price

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 EXAMPLE
1:
How much less can you get when you buy a wall clock that is
originally sold at PHP 1,300.00 if it will be sold at a 12% discount
rate?
Given:
Original Price = PHP 1,300
Discount Rate = 12%

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 EXAMPLE
2:
In a departmental store, an Php 400 dress is marked with Save 25
%. What will be the discount? What will be the sale price of this
dress?

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 EXAMPLE
3:
Which offer is better? Brand X is selling a beauty soap at a price of
PHP 120.00 with a discount of PHP 30.00 while Brand Y is selling
the same beauty soap at a price at a price of Php 130.00 at a 30%
discount.

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12
 MARK-
UP
╸ Usually calculated as a percent of
the wholesale price. Applications of
Mark-up are very common in retail
settings. To determine the amount
of the mark-up, multiply the mark
up rate by the wholesale price.

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 MARK-
UP
╸ Mark-Up Rate - The percent of
mark-up
╸ Whole Price - The price a retailer
pays for an item
╸ List Price - When the retailer adds
a mark-up to the wholesale, the
price he sells the item for.
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 FORMULA
:
To get the mark-up
Mark-up = Mark-up Rate x Wholesale Price
To get the list price
List Price = Wholesale Price x (1 + Mark-up Rate)
To get the mark-up rate
Mark-up Rate = List Price / Wholesale Price x 100
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EXAMPLE
1:
An entrepreneur bought a T-shirt at a wholesale price of PHP
125.00 each. If he wishes to obtain a mark-up rate of 12% at
what amount must he sold every item?

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EXAMPLE
2:
A computer store used a markup rate of 40%. Find the selling
price of a computer game that cost the retailer $25.

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EXAMPLE
3:
A product that regularly sells for $425 is marked down to
$318.75. What is the discount rate?

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LESSON 8
SIMPLE AND
COMPOUND INTEREST
 INTERES
T
╸ Interest is the amount of increase
added to the principal value
╸ Principal Value is the initial amount
invested.
╸ Period is the turnaround time at
which principal value is expected to
increase.
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 INTERES
T
╸ Interest is the cost of borrowing money
as in the case of interest charged on a loan
╸ balance. It is also the rate paid for money
on deposit as in the case of a deposit.
╸ Interest is calculated in 2 ways: simple
interest and compound interest.

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 SIMPLE
INTEREST
╸ Calculated on the principal, or original, amount of a loan.
Formulas:
I=Pi t
Where:
P = Principal Value / Present Value
I = Interest
i = Interest Rate
t = Duration
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 SIMPLE
INTEREST
𝐹
F=P+I 𝑃=
Where: (1+𝑖)(𝑡 )
F = Future Value Where:
I = Interest P = Present Value
i = interest rate
t = duration

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EXAMPLE
1:
A 2-year loan of $500 is made with 4% simple interest. Find
the interest earned.

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EXAMPLE
2:
Ann opens a saving account with a deposit of $670. She will
earn 1.5% interest each year on her money. How much interest
will she earn over a period of 10 years? (assuming she does
not add or take out any money)

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EXAMPLE
3:
A business takes out a simple interest loan of $10,000 at a rate
of 7.5%. What is the total amount the business will repay if the
loan is for 8 years?

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 COMPOUND
INTEREST
╸ Calculated on the principal amount
and also on the accumulated interest
of the previous period and can thus
be regarded as “interest on
interest”.

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 COMPOUND
INTEREST
╸ The following formulas are used in
calculating the future value after a
certain period given a principal
value at a specific interest rate.

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 COMPOUND
INTEREST
𝑖 𝑛𝑡
𝐹=𝑃 (1+ )
𝑛 Where:
I=F-P
F = Future Value
P = Present Value / Principal Value
I = Interest
i = Interest Rate
t = Duration
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 COMPOUND
INTEREST
𝑖 𝑛𝑡 Note: the interest rate is always assumed to be in

𝐹 =𝑃 (1+ )
terms of number of years. The value of n varies
depending on the frequency of the interest rate
𝑛 compounded in a year. Summarized below are the
most common frequency of compounding used:
I=F-P
Where:
F = Future Value
P = Present Value / Principal
Value
I = Interest
i = Interest Rate
t = Duration 30
EXAMPLE
1:
How much can you earn after investing Php 15,500.00 in a
bank account paying 8% compounded annually for 10 years?

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EXAMPLE
2:
How much more can you gain in investing Php 100,000.00 in
a 10% simple interest for 15 years than in a 5% compound
interest for 15 years as well compounded quarterly?

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 ASSIGNMEN
T:
1. In a video store, a DVD that sells for Php 150 is marked, with 10% off. What will
be the discount? What will be the sale price of the DVD in-store? Find using
discount formula.
2. A golf store pays its wholesaler $40 for a certain club, and then sells it to a golfer
for $75. What is the markup rate?
3. Dave borrows $1500 to repair his house. He will pay off the loan after 3 years by
paying back the principal plus 3.5% interest for each year. How much will he pay
in interest, and how much will she pack back altogether?
4. If you deposit Php 5,000.00 into an account paying 6% annual interest
compounded monthly, how long until there is Php 8,000.00 in the account?
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ANY
QUESTION
?
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