1. MODULE 4 Business-related Mathematics Chapter 20 Principles of Financial Mathematics

2. 20.1 Percentage Change A percentage increase or decrease is the amount of the increase or decrease expressed as a percentage of the original value. Percentage change = amount of change X 100 original value 1

3. Calculating the amount of the discount and the new price Discount = Reduction in original price/value If an r% discount is applied, then: discount = r x original price 100 1 New price = original price – discount = (100 – r) x original price 100 1 Refer to Example 1 page 524

5. Calculating the amount of the increase and the new price Mark Up = Increase in original price/value If an r% increase is applied, then: increase = r x original price 100 1 New price = original price + increase = (100 + r) x original price 100 1 Refer to Example 2 page 524

6. Calculating the amount of the increase and the new price Mark Up = Increase in original price/value If an r% increase is applied, then: increase = r x original price 100 1 New price = original price + increase = (100 + r) x original price 100 1 Refer to Example 2 page 524

8. Percentage discount = discount x 100 original price 1 or Percentage increase = increase x 100 original price 1 Refer to Example 3 page 525

10. Calculating the original price Sometimes we are given the new price and the percentage increase or decrease (r %), and asked to determine the original price. This can be done by rearranging the formulas for the new price to make the original price the subject.

11. When an r% discount has been applied: Original price = new price x 100 1 ( 100 – r ) When an r% increase has been applied: Original price = new price x 100 1 ( 100 + r ) Refer to Example 4 page 526