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application of maths in buissness
1. EXAMPLE
• Q. Price of a car was Rs. 3,27,000,it has
• increased 10% this year, what is the price now?
• Sol. Given,
• Price of a car before 2 years= Rs. 3,27,000
• We know that,
• Increased Price=10% of 3,27,000
• =10/100 x 3,27,000
• = Rs. 32,700
• The present price=Old price+Increased amount
• =3,27,000+32,700
• = Rs. 3,59,700
• The price of car now is Rs. 3,59,700.
2. DISCOUNT
• A discount is a price reduction offered on the
• marked price.
• Discounts are offered by shopkeepers to
• attract customers to buy goods and thereby
• increase sales.
• Discount=Marked price(M.P.)-Selling
• price(S.P.)
• A discount is, in fact, a percentage decrease,
• because the amount of change or discount is
• compared with the initial price or marked
• price.
3. DISCOUNT PERCENTAGE
• A ratio is an expression that compares quantities
• relative to each other.
• When we compare two quantities in relation to each
• other, such a comparison is mathematically expressed
• as a ratio.
• Percent means ‘per hundred’ or out of hundred.
• Percentage is another way of comparing ratios that
• compare to hundred.
• A change in quantity can be positive, which means an
• increase, or negative, which means a decrease. Such
• a change can be measured by a increase percent or a
• decrease percent.
4. FORMULAE WITH DISCOUNT
GIVEN
A) Rate of Discount=Discount x 100
M.P.
B) S.P.=[100-Discount%] x M.P.
100
C) M.P.=[ 100 ] x S.P.
100-Discount%
5. SALES TAX
Sales tax is charged by the government on the
selling price of an item and is included in the bill
amount. Sales tax has been replaced by a new
tax
called Value added tax(VAT).
6. PROFIT AND
LOSS
• Profit and loss depends on cost price and selling
price. If cost price is less than selling price, there is a
profit. Profit is calculated by subtracting cost price
from selling price.
• Profit=SP-CP
• If cost price is greater than selling price, then
there is a loss. Loss is calculated by subtracting
selling price from cost price.
• Loss=CP-SP
7. FORMULAE
• A) Percentage change=Actual change x 100
Original amount
• B) Profit%=Profit x 100
C.P.
• C) Loss%=Loss x 100
C.P.
• D) S.P.=[100+Gain%] x C.P. OR [100-Loss%] x C.P.
100 100
• E) C.P.=[ 100 ] X S.P. OR [ 100 ] X S.P.
100+Gain% 100-Loss%
8. EXAMPLES
• Q. The cost of a pair of shoes at a shop was Rs.
• 550. The sales tax charged was 4%. Find the bill
• amount.
• Sol. Given,
S.P.= Rs. 550
We know that,
Sales tax=4% of 550
= 4 x 100
550
= Rs. 22
• Therefore, Bill amount=SP + Sales tax
=550+22
= Rs. 572
The bill amount is Rs. 572
9. EXAMPLE
• Q. Ramesh purchased one LCD for Rs.
• 12,000 including a tax of 10%. Find the
• price of LCD before VAT was added?
• Sol. Let the price of LCD before adding VAT be Rs. y.
• Given that,
• y+(10% of y)=12,000
• y+( 10 )x y=12,000
( 100 )
• 11y =12,000
10
• y=12,000 x 10 = Rs. 10909
10. SIMPLE AND COMPOUND INTEREST
• Interest is the extra money that a bank gives you for
• saving or depositing your money with them. Similarly,
• when you borrow money, you pay interest.
• With simple interest, the interest is calculated on the
• same amount of money in each time period, therefore,
• the interest earned in the each time period is the same.
• On the other hand, the compound interest is calculated
• on principal plus the interest for the previous period.
• The principal amount increases with every time period,
• as the interest payable is added to the principal. This
• means interest is not only earned on the principal, but
• also on the interests of the previous time periods.
• So we can say that the compound interest calculated is
• more than simple interest on the same amount of money
• deposited.
11. • Interest is generally calculated on a yearly
basis. Sometimes, it can be compounded
more than once within a year. It can be
compounded half yearly, which means twice a
year, or quarterly, which means four times a
year. The period for which interest is
calculated is called the conversion period. At
the end of the conversion period, the interest
is added to the principal to get the new
principal.
12. FORMULAE
• A) Simple Interest=Principal x Rate x Time period
100
• B) Amount=Principal + Simple interest
• C) Compound Interest=Amount-Principal
n
• D) Amount=P[1+ R ]
100
13. EXAMPLES
• Q. Find the compound interest for Rs. 5000 at
• the rate of 10% p.a. for 3 years compounded
• annually.
• Sol. Given,
P=5000, R=10% p.a. , n=3 Years
• We know, n 3
• A=P[1+ R ] = 5000[1+ 10]
100 100
• =5000 x 11 x 11 x 11
10 x 10 x 10
= Rs. 6655
• Compound interest= Amount- Principal
• = 6655-5000
• = Rs. 1655
14. EXAMPLE
• Q. What amount is to be repaid on a loan of Rs.
• 12000 for 1 year at 10% p.a. compounded half
• yearly?
• Sol. Given,
• P=12,000 , R=10% p.a. , n=1 Year
• As interest is compounded half yearly,
• n=1 x 2=2 Years
• R=half of 10%=5% half yearly
• We know that, n 2
• A=P[1+ R ] = 12,000[1+ 5 ]
100 100
• = 12000 x 21 x 21
20 x 20
• = Rs. 13230
• The amount to be repaid is Rs. 13230.
15. What is a commission?
• What is a commission?
• A commission is a fee paid to a person who
• makes a sale.
• The commission is usually a percent of the
• selling price. The percent is called the
• commission rate.
• commission x commission rate x total sales
16. Example
• Carmen Pena works in an appliance store. She
is paid a 5% commission rate on all appliances
that she sells. What is her commission on the
sale of a television set that costs $369?
commission x commission rate x total sales
5% x 369
= $18.45