Discounts, Markups and Interest 07/30/12lntaylor ©

Table of Contents Learning Objectives Discounts Markups Interest and Commission Practice 07/30/12lntaylor ©

LO1: LO2: Define and differentiate discounts, markups and interest Read and correctly interpret word problems with above 07/30/12lntaylor © TOC Learning Objectives

Def1: Def2: Markup (in $$) is the sales price – cost (aka profit) Markup (in %) is the sales price/cost Discount (in $$) is the original sales price – new price Discount (in %) is (original sales price– new price)/original sales price 07/30/12lntaylor © TOC Definitions Def3:Interest is money paid for the use of money Commission is money paid a salesperson to sell an item(s)

PK1:Knowledge of fractions and decimals 07/30/12lntaylor © TOC Previous Knowledge

07/30/12lntaylor © TOC Discounts

Step1: Step2: You absolutely must carefully read & understand discount questions before you start the problem!!!!!! You have two choices of where to start this problem (20 or 130) Only one will give you the correct answer! 07/30/12lntaylor © TOC A dress is discounted 20% from an original sales price of $130. What is the new sales price? Step3:Hint: Look for the number following the word “sales price” That number is the beginning number Take the other number, convert it to a decimal and subtract it from 1 You are looking for a $$ number so this becomes a multiplier Step4:Multiply the two numbers The result is your answer Note:Discount means you will end up with a lower price! $ – 0.20 = 0.80 sales price130 x 0.80 $ 104

Now you try A TV was originally priced at $500 and sold for $300. What percent was it discounted? 07/26/12lntaylor © TOC

Step1: Step2: You absolutely must carefully read & understand discount questions before you start the problem!!!!!! You have two choices of where to start this problem (500 or 300) Only one will give you the correct answer! 07/30/12lntaylor © TOC A TV was originally priced at $500 and sold for $300. What percent was it discounted? Step3:Hint: Look for the number following the word “original price” That number is the beginning number You are looking for a % so this is a denominator Find the new sales price and subtract it from the old sales price That is the numerator Step4:Convert to fraction, then decimal, then percent The result is your answer Note:Discount means you will end up with a lower price! _____ $ – 300 = 200 original price500 $ %

Now you try What was the original price of a pair of shoes if the new price of $250 included a 40% discount? 07/26/12lntaylor © TOC

Step1: Step2: You absolutely must carefully read & understand discount questions before you start the problem!!!!!! You have two choices of where to start this problem (250 or 40) Only one will give you the correct answer! 07/30/12lntaylor © TOC What was the original price of a pair of shoes if the new price of $250 included a 40% discount? Step3:Hint: Look for the number following the word “original price” That number is the beginning number (unknown = x) You are looking for a % so this is a denominator Find the new sales price This is the numerator Find the percent and subtract from 100 Step4:Solve for x by converting percent to decimal The result is your answer Note:This problem is like a markup problem and you will end up with a higher price! _____ x $250 original price = 60% 40% $250 = 0.60x $250 = x 0.60 = $416.67

07/30/12lntaylor © TOC Markups

Step1: Step2: You absolutely must carefully read & understand markup questions before you start the problem!!!!!! You have two choices of where to start this problem (20 or 100) Only one will give you the correct answer! 07/30/12lntaylor © TOC A dress is marked up 20% from an original cost of $100. What is the sales price? Step3:Hint: Look for the number following the word “cost” That number is the beginning number Take the other number, convert it to a decimal and add it to 1 Did you notice discounts are subtracted from 1 And markups are added to 1? You are looking for a $$ number so this becomes a multiplier Step4:Multiply the two numbers The result is your answer Note:Markup means you will end up with a higher price! $ = 0.80 cost$100 x 1.20 $ 120

Now you try A TV cost a retailer $500. She sold it for $625. What was the percent markup? 07/26/12lntaylor © TOC

Step1: Step2: You absolutely must carefully read & understand discount questions before you start the problem!!!!!! You have two choices of where to start this problem (500 or 625) Only one will give you the correct answer! 07/30/12lntaylor © TOC A TV cost a retailer $500. She sold it for $625. What was the percent markup? Step3:Hint: Look for the number following the word “original price” That number is the beginning number You are looking for a % so this is a denominator Find the new sales price That is the numerator Step4:Divide and convert to percent Subtract 100%; the result is your answer Note:Discount means you will end up with a lower price! _____ $ 500 $625cost500 $ %- 100% = 25%

Now you try If a retailer markups up their shirts 150%, what is the sell price of a shirt that cost him $50? 07/26/12lntaylor © TOC

Step1: Step2: You absolutely must carefully read & understand markup questions before you start the problem!!!!!! You have two choices of where to start this problem (50 or 150) Only one will give you the correct answer! 07/30/12lntaylor © TOC If a retailer markups up their shirts 150%, what is the sell price of a shirt that cost him $50? Step3:Hint: Look for the number following the word “cost” That number is the beginning number Take the other number, convert it to a decimal and add it to 1 Did you notice discounts are subtracted from 1 And markups are added to 1? You are looking for a $$ number so this becomes a multiplier Step4:Multiply the two numbers The result is your answer Note:Markup means you will end up with a higher price! $ = 2.50 cost$50 x 2.50 $ %

07/30/12lntaylor © TOC Interest and Commission

Step1: Step2: You absolutely must carefully read & understand interest questions before you start the problem!!!!!! You have two choices of where to start this problem (4000 or 5) Only one will give you the correct answer! 07/30/12lntaylor © TOC Jane has $4,000 earning 5% in an account with Great Bank and Savings. How much interest will Jane make in one year. Assume simple interest. Step3:Hint: Look for the number following the word “dollars” or “$” That number is the beginning number (aka principal) Take the other number, convert it to a decimal Did you notice we did not add/subtract 1? That is because they want to know only the $ made from interest You are looking for a $$ number so this becomes a multiplier Step4:Multiply the two numbers The result is your answer $ 4, $4,000 x 0.05 $ 200 5%

Now you try How much interest does Kevin pay on a loan of $10,000 with 5% simple interest? 07/26/12lntaylor © TOC

Step1: Step2: You absolutely must carefully read & understand interest questions before you start the problem!!!!!! You have two choices of where to start this problem (10,000 or 5) Only one will give you the correct answer! 07/30/12lntaylor © TOC How much interest does Kevin pay on a loan of $10,000 with 5% simple interest? Step3:Hint: Look for the number following the word “dollars” or “$” That number is the beginning number (aka principal) Take the other number, convert it to a decimal Did you notice we did not add/subtract 1? That is because they want to know only the $ made from interest You are looking for a $$ number so this becomes a multiplier Step4:Multiply the two numbers The result is your answer $ 10, $10,000 x 0.05 $ 500 5%

Now you try How much money (balance) is in Karen’s account If she earns 7% interest after one year? Assume simple interest. 07/26/12lntaylor © TOC

Step1: Step2: You absolutely must carefully read & understand interest questions before you start the problem!!!!!! You have two choices of where to start this problem (7 or 12,000) Only one will give you the correct answer! 07/30/12lntaylor © TOC How much money (balance) is in Karen’s account if she earns 7% interest on $12,000 after one year? Assume simple interest. Step3:Hint: Look for the number following the word “dollar” or “$” That number is the beginning number (aka principal) Take the other number, convert it to a decimal and add it to 1 You are looking for a $$ number so this becomes a multiplier Step4:Multiply the two numbers The result is your answer Note:Interest is also known as a return on investment! $ 12, = 1.07 $12,000 x 1.07 $ 12,840 7%

Now you try John earns a 5% commission on every pair of shoes he sells. Last month John sold $42,500 worth of shoes. How much commission did John make last month? 07/26/12lntaylor © TOC

Step1: Step2: You absolutely must carefully read & understand commission questions before you start the problem!!!!!! You have two choices of where to start this problem (5 or 42,500) Only one will give you the correct answer! 07/30/12lntaylor © TOC John earns a 5% commission on every pair of shoes he sells. Last month John sold $42,500 worth of shoes. How much commission did John make last month? Step3:Hint: Look for the number following the word “dollars” or “$” That number is the beginning number (aka sales or revenue) Take the other number, convert it to a decimal Did you notice we did not add/subtract 1? That is because they want to know only the $ made from commission You are looking for a $$ number so this becomes a multiplier Step4:Multiply the two numbers The result is your answer $ 42, $ 42,500 x 0.05 $ 2,125 5%

Now you try Mary earns a 7% commission on every house she sells. Last month’s sales for Mary were $4,675,000. How much commission did Mary make last month before taxes? 07/26/12lntaylor © TOC

Step1: Step2: You absolutely must carefully read & understand commission questions before you start the problem!!!!!! You have two choices of where to start this problem (7 or 4,675,000) Only one will give you the correct answer! 07/30/12lntaylor © TOC Mary earns a 7% commission on every house she sells. Last month’s sales for Mary were $4,675,000. How much commission did Mary make last month before taxes? Step3:Hint: Look for the number following the word “dollars” or “$” That number is the beginning number (aka sales or revenue) Take the other number, convert it to a decimal Did you notice we did not add/subtract 1? That is because they want to know only the $ made from commission You are looking for a $$ number so this becomes a multiplier Step4:Multiply the two numbers The result is your answer $ 4,675, $4,675,000 x 0.07 $ 327,250 7% Note:Yes people do make that kind of money in sales…!

07/30/12lntaylor © TOC Practice

07/30/12lntaylor © TOC ProblemAnswer How much is a 20% discount on a shirt of $50? What is a 55% markup on a shirt that cost $100? What is the sales price on $50 shoes with a 55% markup? What is the 10% discounted price of a $5,000 car? What is a 10% commission on a $30,500 car? How much interest does 7% pay on a $40,000 balance? What is the sell price of a $60 shirt after a 60% markup? What is a 15% commission on a $45,000 insurance policy? What is the final sales price on a $500 suit that has been discounted 25% and another 10%? > $10 > > > > > $55 $77.50 $4,500 $3,050 $2,800 > $96 > $6,750 > $ ($500(.75)(.9)) clear answers