1. Slide 1 © 2002 McGraw-Hill Australia, PPTs t/a Introductory Mathematics & Statistics for Business 4e by John S. Croucher Percentages n Learning Objectives Understand and use percentages Apply percentages to common commercial situations Calculate commission (including brokerage) Calculate discounts (including chain, trade and cash) Calculate tax (including GST, personal and company) Calculate profit and loss Calculate stamp duty Chapter M2

2. Slide 2 © 2002 McGraw-Hill Australia, PPTs t/a Introductory Mathematics & Statistics for Business 4e by John S. Croucher Use of percentages n Important economic and business concept: many statistics expressed as a percentage remuneration for selling goods and services is often expressed as a percentage many discounts are expressed as a percentage brokerage rates are quoted as a percentage GST, company and personal tax is expressed as a percentage. n A percentage expresses a number as the numerator of a fraction in which 100 is the denominator.

3. Slide 3 © 2002 McGraw-Hill Australia, PPTs t/a Introductory Mathematics & Statistics for Business 4e by John S. Croucher Conversion to percentages Conversion of a fraction to a percentage n Multiply by 100 and use % sign

4. Slide 4 © 2002 McGraw-Hill Australia, PPTs t/a Introductory Mathematics & Statistics for Business 4e by John S. Croucher Conversion from percentages Conversion of a percentage to a fraction n Divide by 100 and remove % sign

5. Slide 5 © 2002 McGraw-Hill Australia, PPTs t/a Introductory Mathematics & Statistics for Business 4e by John S. Croucher Commission An agent is paid a commission when he or she sells goods and services. n Commission is a percentage of the gross sale amount. n Where: S = sale amount R = rate of commission per sale

6. Slide 6 © 2002 McGraw-Hill Australia, PPTs t/a Introductory Mathematics & Statistics for Business 4e by John S. Croucher Brokerage Brokerage is commission paid to a stockbroker who acts on client’s behalf. –Brokerage is subtracted from the sale proceeds. –Brokerage is added to the cost of the purchase.

7. Slide 7 © 2002 McGraw-Hill Australia, PPTs t/a Introductory Mathematics & Statistics for Business 4e by John S. Croucher Discounts and trade discounts n Discount is an inducement for the customer to make a purchase. n Where: L = list price D = amount of discount R = rate of discount DP = discount price

8. Slide 8 © 2002 McGraw-Hill Australia, PPTs t/a Introductory Mathematics & Statistics for Business 4e by John S. Croucher GST—10% Australian broad-based tax of 10% on most supplies of goods and services. n GST increases the price paid by 10% n GST amount is the inclusive price divided by 11

9. Slide 9 © 2002 McGraw-Hill Australia, PPTs t/a Introductory Mathematics & Statistics for Business 4e by John S. Croucher Personal and company income tax Income tax is calculated as a percentage of taxable income earned during the financial year. n Company tax is a fixed rate of 30%. n Personal tax is levied on a sliding scale with a maximum rate of 48.5% including Medicare.

10. Slide 10 © 2002 McGraw-Hill Australia, PPTs t/a Introductory Mathematics & Statistics for Business 4e by John S. Croucher Profit and loss n Profit and loss, and other ratios, are expressed as percentages. n Profit and loss is expressed as a percentage of: –cost price –selling price.