BUSINESS MATHEMATICS & STATISTICS

LECTURE 15 Review Lecture 14 Financial Mathematics Part 2

PARTIAL PAYMENTS You owe Rs. 40,000. Your terms were 3/10 Within 10 days you sent in a payment of Rs. 10,000 How much is your new balance?

MARKETING TERMS Manufacturer Cost The price charged to middlemen in ‘The Distribution Chain’ Distributor>Wholesaler>Retailer Selling Price The price charged to Consumers by Retailers

MARKETING Gross Sales Rs X Less: Cost of Good Sold X Gross Profit X (Margin/MarkUp) Less: Operating Expenses X Net Profit (Income) Rs. X Operating Expenses Expenses the company incurs in operating the business,e.g. rent, wages and utilities

SELLING PRICE Selling Price (S) = Cost (C) + Markup (M) Example A computer’s cost = 9, ,000 Rs. = 12,000 Rs. Rs. 3,000 is margin available to meet Expenses and make a Profit

MARKUP If the MarkUp is to be 33% on Cost then… Selling Price (S) = Cost (C) + Markup (M) 133% = 100% + 33% Cost is 100% the Base % MarkUp is the Rate Rs. MarkUp is the Portion

MARKUP You buy candles for Rs. 10 You plan to sell them for Rs.15 What is your Rs. markup? What is your percent markup on cost? Selling price – cost= 15 – 10 = Markup = 5 Rs. % markup = 5/10*100 = 50%

Selling Price Fawad’s Appliances bought a sewing machine for Rs. 1,500 To make the desired profit, he needs a 60% markup on Cost. What is Fawad’s Rs. markup? What is his Selling price?

Selling Price Rs. Markup = 1,500 x 0.6 = 900 Rs. Selling Price = 1, = 2,400 Rs. Or = 1,500 x (1+0.6) = 1,500 x 1.6 = 2,400 Rs.

Rs. MarkUp and Percent on Cost Tanveer’s flower business sells floral arrangements for Rs.35. To make his desired profit, Tanveer needs a 40% markup on cost. What do the flower arrangements cost Tanveer? What is the Rs. markup?

Rs. MarkUp and Percent on Cost S = C + M 35= C +.40(C) 35 = 1.40(C) C= 35/1,4= 25 Rs. M = 25 x 0.4 = 10 Rs.

MARKUP AGAIN You buy candles for 2 Rs. You plan to sell them for 2.50 Rs What is your Rs. markup? What is your percent markup on Selling Price?

MARKUP AGAIN Rs. Markup = 2.5 – 2 = 0.5 Rs. Percent markup on Selling Price = (0.5/2.5) x 100 = 20%

Selling Price Again Fawad’s Appliances bought a sewing machine for Rs. 1,500 To make the desired profit, he needs a 60% markup on Selling price What is Fawad’s Rs. markup? What is his Selling price?

Selling Price Selling Price S = 1, S S-0.6S = 1,500 Rs. Or 0.4S= 1,500 = 3,750 Rs Rs. Markup = 3,750 x 0.6 = 2,250 Rs.

Rs. MarkUp and Percent on Cost Tanveer’s flower business sells floral arrangements for Rs. 35. To make his desired profit, Tanveer needs a 40% markup on selling price What do the flower arrangements cost Tanveer? What is the Rs. markup?

Selling Price Selling Price = 35 = C + 0.4x 35 35= C + 14 C = 35 – 14 = 21 Rs. Or C= S- 0.4 S = 0.6 S = 0.6 x 35= 21 Rs. Rs. Markup = 35 x 0.4 = 14 Rs.

Converting Markups Converting 50% MU on Cost = ? % MU on S Formula % Markup on Selling Price (mus) to % Markup on Cost (muc)= % markup on C 1 + % markup on C mus = muc/1+muc = 0.5/1+0.5 = 0.5/1.5 mus= = 33.33%

Converting Markups Converting 33.33% MU on Sale = ? % MU on C Formula % Markup on Selling Price (mus) to % Markup on Cost (muc)= % markup on S 1 - % markup on S muc = mus/1-mus = /1 – = / = 0.5 = 50%

BUSINESS MATHEMATICS & STATISTICS

MARKDOWN Formula %Markdown = Rs. Markdown Selling Price (original) Store A marked down a Rs. 500 shirt to Rs. 360 What is the Rs. Markdown What is the %markdown?

MARKDOWN Rs. Markdown = Old S – New S = Rs. 500 – Rs. 360 = Rs. 140 Markdown %Markdown = Markdown Old S = = 0.28 = 28 %

MARKDOWN A variety of plastic jug was bought for Rs was marked up 45% of the Selling Price When the jugs went out of production, they were marked down 40% What was the Sale Price after the 40% markdown?

MARKDOWN Selling price = 100 Markup = 45 Cost = 55 Original Sale price= (100/55) x = 105 Markdown = 40 % = 0.4 Rs. Markdown = 105 x 0.4 = 42 Reduced sale= = 63 Rs.

BUSINESS MATHEMATICS & STATISTICS