1. Algebra 1
Section 3.6

2. An understanding of the proper use of money is important to living the godly life that is expected of a Christian.

3. Definitions
The cost is the amount a merchant pays for the merchandise he will sell.
The markup is the amount the merchant adds to his cost to arrive at the retail price.

4. Definitions
The markup rate is the amount of markup on an item as a percent of its cost.
markup = markup rate × cost
cost + markup = retail price

5. Definitions
The retail price is the merchant’s cost plus markup; it is the regular amount a merchant asks his customer to pay for merchandise.

6. Definitions
The discount rate is the percent by which the retail price is reduced.
The discount is the amount by which the retail price is reduced.

7. Definitions
The sale price is the customer’s cost after the retail price has been discounted.
discount = discount rate × retail price
retail price – discount = sale price

8. Example 1 markup = markup rate × cost markup = 0.75(15) = 11.25
cost + markup = retail price
= $26.25

9. Example 1 Or...you can do it this way:
retail price = cost (cost)
= ( )(cost)
= 1.75(cost)
= 1.75(15)
= $26.25

10. Example 2
discount rate × retail price = discount
0.3r = 52.50
52.5
0.3
r =
= $175
sale price = retail price – discount
= 175 – 52.50
= $122.50

11. Example 2 Or...you can do it this way:
sale price = retail price – discount
= retail price – (discount rate) (retail price)
= retail price – 0.3(retail price)
= 0.7(retail price)

12. Definitions A tip is the amount paid for a personal service.
tip rate × total bill = tip

13. Definitions
Commission is the dollar amount an employee receives as a result of the sales he makes.

14. Definitions
The rate is the percent used to determine a tip or commission based on the amount of the bill or an employee’s sales.
commission rate × sales = commission

15. Example 4
salary + commission rate × sales = commission
r = 3660
8250r = 1485
1485
8250
r =
= 0.18
r = 18%

16. Simple Interest I = Prt I = amount of simple interest
P = principal invested/borrowed
r = annual interest rate (decimal)
t = time (years)

17. $300 was invested in each account.
Example 5 P r t = I
1st
2nd x
0.05
0.07 1 =
0.05x
0.07x
12x = 3600
x = 300
$300 was invested in each account.
0.05x x = 36
5x + 7x = 3600

18. Note that x is in years, not months!
Example 6 P r t = I 6% 8%
500
900
0.06
0.08 x
x – 0.25 =
500(0.06)x
900(0.08)(x – 0.25)
30x
72(x – 0.25)
Note that x is in years, not months!
x = 0.5 (years)
x = 6 months

19. Example 6 x = 6 months The $500 loan was for 6 mo.

20. Percent Formulas Percent × Whole = Part Markup Rate × Cost = Markup
Discount Rate × Retail Price = Discount
Tip Rate × Total Bill = Tip

21. Percent Formulas Commission Rate × Sales = Commission
Principal × Rate × Time = Interest

22. Homework: pp