Download presentation
Presentation is loading. Please wait.
1
BUSINESS MATHEMATICS & STATISTICS
2
Financial Mathematics Part 1
LECTURE 14 Review Lecture 13 Financial Mathematics Part 1
3
SERIES DISCOUNT This refers to the giving of further discounts as incentives for more sales Example 15% off first Then… 10% off next Then … 5% off next Total discount not 30%
4
The series discounts are
Trade Discount The price of office furniture is Rs. 20,000 The series discounts are 20%,10%, 5% What is the net price?
5
Trade Discount N = L(1 – d) N = (1-d1) (1-d2) (1-d2)
= 20,000(1-.2)(1-.10)(1-.05) = 20,000(.8)(.9)(.95) = 20,000(.6840) = 13,680
7
LIST PRICE? An order for power tools has a Rs net price after a 30% trade discount. What is the list price? Net Price = L(1 – d) L = N/(1 – d) = 2100/(1 – .3) = 2100 /(.7) = 3000 Rs.
9
TRADE DISCOUNT Find the single discount rate
that is equivalent to the series 15%, 10% and 5%. Net Price N = L(1 – d)
10
Apply the multiple discounts to a List price of Rs.100
TRADE DISCOUNT Apply the multiple discounts to a List price of Rs.100 N = 100(1-d1)(1-d2)(1-d3) 15%, 10%, 5% =100(0.85)(0.9)(0.95) = 100(0.7268) = 72.68% % Discount = % = 27.62%
13
TRADE DISCOUNT The price of car parts is Rs. 20,000.
The series discounts are 20%, 8%, 2%. What is the single equivalent discount rate?
14
TRADE DISCOUNT =100(0.8)(0.92)(0.98) = 100(0.7213) = 72.13%
= 27.87% Rs. Discount = (0.2787)(20000) = 5,574 Rs.
16
A discount given for the prompt payment of an account
CASH DISCOUNT A discount given for the prompt payment of an account No Cash Discount Invoice Returned Goods Freight Sales Tax & Trade Discounts
17
CASH DISCOUNT Discount Periods
Period for buyer to take advantage of Discount Terms Credit Periods Period for buyers to pay invoices
18
CASH DISCOUNT Invoice Dated May 3 Terms 2/10
Discount 2% if invoice paid upto 10 May then discount can be claimed
19
CASH DISCOUNT What is the net payment for invoice value of Rs. 50,000 if paid upto 10 May? N = L(1 – d) = 50,000(1-0.02) = 50,000(0.98) = 49,000 Rs.
21
BUSINESS MATHEMATICS & STATISTICS
Similar presentations
© 2025 SlidePlayer.com. Inc.
All rights reserved.