markup, discount, taxes, and interest

Applying Percent

Markup, Discount, Taxes, and Interest

Our Objective?

• We will take the skills we have used in finding percent values and apply this to real-world problems

Vocabulary• Taxes A percent of an item’s cost added to find the final price Interest A percent of an amount of money (principal) added to, or paid for, its use Markup An amount, based on a percent, added TO a value to INCREASE its price Discount An amount, based on a percent, deducted FROM a value to DECREASE its

price

Wholesale Retail% of price increase = markup

Sales TaxIn Tennessee, we have a 9.25% sales tax.

What would the final price be for an iPod case that costs $27.50?

Price: $27.50Tax rate: x .0925Sales tax: $2.54

Final cost? $27.50 + 2.54 $30.04

If you are ONLY lookingfor the final price, thereis a one-step method:

$27.50 (1.0925) = This gives you

the tax amount.This adds the priceback into the problem.

What is the sales tax on a$1200 television?

$1200(.0925) = sales tax

$111.00 = sales tax

So the $1200 television will cost $1311 at the checkout.

Your savings account earns 3% each year.How much interest will you earn on aprincipal of $2500 for one year?

Simple interest formula: I = prt This means the interest you earn= principal($)rate(%)time(in years)

I = prt I = 2500(.03)1 I = $75

Year 1 $2500 Interest $ 75.00 Balance $2575.00

Year 2 $2575 Interest (.03)2575 Balance

Year 3 Interest Balance

$ 77.25 $2652.25

$ 2652.25 $ 79.57 $ 2731.82

Let’s see how much you would havein the bank if you let your interest becomepart of the principal for three years.

Your home has a 4.5% interest rate on a mortgage of$175,000 for a 30-year period.

How much total interest could you expect to pay onthis home over the life of the loan?

I = prt

This is just the interest…….NOT the amountof the mortgage…….

Ready ????I = $236,250

I = $175,000(.045)(30)

This is an oversimplified application of mortgage interest…….

Your credit card has a balance of $2500.

The issuing company charges you 18% annualinterest. How much will you pay in interestover one year?

I = prt

I = 2500(.18)1I = $450.00

Not in your notes…

What would you have to pay asa one-time payment if you paid theentire balance off in 6 months?

I = prtI = 2500(.18)(.5)I = $225.00

$2500 + 225 = $2725.00

As a store-owner, you mark-up what you haveto pay for an item so you can make a profit.

You purchased some lap desks for computers at a cost of $12 each..

You will markup each lap desk by 70% to find your retail price. What is the retail price?

What is 70% of 12?n = .70 ( 12 )n = $8.40

Retail price??$12.00 + $8.40 =

$ 20.40

If you paid $125 for each DooBop,and you will sell each for $210,what is your percent of markup?(% of increase??)

Increase = change original

Increase = 85 $125

Increase = 68%

You have been looking at a computer that normally retailsfor $850.00

Today it is on sale for 20% off.Find both the discount and sale price..20(850) = discount$170 = discount

Price – discount = sale price$850 - $170 = $680

One-Step Method for Sale Price ONLY!!!!!!!!

If you are NOT going to pay 20% of the retailprice, you WILL pay 80% of the price.

$850(.8) = $680

Regular Price

$49.50

12% off

$49.50 (.12) = discount$5.94= discount

$49.50 - $5.94 = $43.56Sale Price????

One step??$49.50 (.88) = sale price

$43.56= sale price

You paid $12.00 for a shirtthat is normally priced at$22.50.

What was the % of discount? (% of decrease)

Change = % decreaseOriginal

$10.50 = % change$22.50

Discount ~ 47%

$2800 15% OFF

.15(2800) = discount$420 = discount

$2800 - $420 = sale price$2380 = sale price

$2800(.85)= sale price$2380 = sale price

$2380(.0925) = tax$220.15 = tax

$220.15 + $2380 = price$2600.15 = price

$2380(1.0925) = price+tax$2600.15 = price

AllSteps

Fewersteps

Previous Applications

• Interest• Taxes• Percent of Change• Discounts and Markups

Today? Commission and tips

Working with CommissionCommission is an amount paid based on a percent of sales.

In your new position as sales manager, you will receive a salary of $500per week and 15% of the sales that your department generates for your store.

How much would you expect to receive if your department sold $25,000 worthof merchandise during the week.

Pay = salary + .15 of sales

Pay = 500 + .15(25,000)

Pay = $500 + $3750

Pay = $4250

As a salesperson in an electronics store, you receive 12% of your sales forone month. You also get a monthly salary of $1000. How much would youhave to create in sales to make $4500 for the month?

4500 = 1000 + .12(sales)

You were disappointed in the sales of your department this month. The salestotaled $3500. This was just 65% of what you had expected. What salesamount had you expected this month? Round to the nearest dollar.

Write an equation………. “This” was(is) 65% of expected3500 = .65(expected sales)

3500 = .65n

Now what? _____ _____ .65 .65

$5385.00 = n

Real estate agents get a commission on homes they sell. The expectedcommission rate is 6%. If an agent sold a home for $200,000, what would their commission be?

TipsTips are normally paid to those in the service industry as recognition forappreciation of a job well done!!!

Tips are normally based on the total of a bill.

The Billings family ate at their favorite restaurant.The final bill came to $56.75. The service was reallygood, so Mr. Billings decided to leave an 18% tip.

What is 18% of 56.75?.18(56.75) = tip amount

$10.22 = tip amount What will they pay forthe dinner with the tip and taxincluded?

Dinner $56.75Tax 5.25Tip + 10.22 $72.22

Don’t forget thetax!!! 9.25%

.0925(56.75) = tax.0925(56.75) = $5.25

You and four friends go out to dinner. You have decided toshare the cost of the meal and the tip equally.The food and service were both good! Everyone agrees toleave a 20% tip!!!!! What will each of you have to pay forthe meal and tip?

Bill Total: $75.00

20% of $75 = tip.2(75) = $15.00$75 + $15.00 = total for all

$90 ÷ 5 = $18.00 each

Clean Clothes for You!!!This washing machine regularly sells for $475.00. This Saturday it will be on sale for 20% off. What will the sale price be? What will the final cost be after you add a 9.25% sales tax?

$475. - discount = sale price

.20(475) = discount$95 = discount

$475.00- 95.00 $ 380.00 Sale Price

$380 (.0925) = sales tax$35.15 = sales tax$ 380.00+ 35.15$ 415.15 = final price

$475(.8)= price $380 = price

Don’t forget me!!!

$380(.12)= commission $45.60 = commission

Did we apply percent conceptsto solve real-world problems?