1. Markup, Discount, Taxes, and Interest
Applying Percent
Markup, Discount, Taxes, and Interest

2. Our Objective?
We will take the skills we have used in finding percent values and apply this to real-world problems

3. Vocabulary
Taxes
A percent of an item’s cost added to find the final price
Interest
A percent of an amount of money (principal) added to, or paid for, its use
Markup
An amount, based on a percent, added TO a value to INCREASE its price
Discount
An amount, based on a percent, deducted FROM a value to DECREASE its price
% of price increase =
markup
Wholesale
Retail

4. Sales Tax In Tennessee, we have a 9.25% sales tax.
What would the final price be for an iPod case that costs $27.50?
If you are ONLY looking
for the final price, there
is a one-step method:
Price: $27.50
Tax rate: x
Sales tax: $2.54
$27.50 (1.0925) =
This gives you
the tax amount.
Final cost? $27.50
$30.04
This adds the price
back into the problem.

5. What is the sales tax on a
$1200 television?
$1200(.0925) = sales tax
$ = sales tax
So the $1200 television will cost $1311 at the checkout.

6. Your savings account earns 3% each year.
How much interest will you earn on a
principal of $2500 for one year?
Simple interest formula: I = prt
I = prt
This means the interest you earn
= principal($)rate(%)time(in years)
Let’s see how much you would have
in the bank if you let your interest become
part of the principal for three years.
I = 2500(.03)1
I = $75
Year $2500
Interest $ 75.00
Balance $
Year $2575
Interest (.03)2575
Balance
Year 3
Interest
$ 77.25 $ $
$ 79.57 $

7. This is an oversimplified application of mortgage interest…….
Your home has a 4.5% interest rate on a mortgage of
$175,000 for a 30-year period.
How much total interest could you expect to pay on
this home over the life of the loan?
I = prt
I = $175,000(.045)(30)
I = $236,250
Ready ????
This is just the interest…….NOT the amount
of the mortgage…….
This is an oversimplified application of mortgage interest…….

8. What would you have to pay as a one-time payment if you paid the
Your credit card has a balance of $2500.
The issuing company charges you 18% annual
interest. How much will you pay in interest
over one year?
I = prt
Not in your notes…
What would you have to pay as
a one-time payment if you paid the
entire balance off in 6 months?
I = 2500(.18)1
I = $450.00
I = prt
I = 2500(.18)(.5)
$ = $
I = $225.00

9. What is 70% of 12? Retail price?? $12.00 + $8.40 = n = .70 ( 12 )
As a store-owner, you mark-up what you have
to pay for an item so you can make a profit.
You purchased some lap desks for computers at a cost of $12 each..
You will markup each lap desk by 70% to find your retail price. What is the retail price?
What is 70% of 12?
Retail price??
$ $8.40 =
n = ( 12 )
$ 20.40
n = $8.40

10. If you paid $125 for each DooBop,
and you will sell each for $210,
what is your percent of markup?
(% of increase??)
Increase = change
original
Increase =
$125
Increase = %

11. You have been looking at a
computer that normally retails
for $850.00
Today it is on sale for 20% off.
Find both the discount and sale price.
.20(850) = discount
Price – discount = sale price
$170 = discount
$850 - $170 = $680

12. One-Step Method for Sale Price ONLY!!!!!!!!
If you are NOT going to pay 20% of the retail
price, you WILL pay 80% of the price.
$850(.8) = $680

13. One step?? $49.50 (.12) = discount $49.50 (.88) = sale price
Regular Price
$49.50
12% off
One step??
$49.50 (.12) = discount
$49.50 (.88) = sale price
$5.94= discount
$43.56= sale price
Sale Price????
$ $5.94 = $43.56

14. You paid $12.00 for a shirt
that is normally priced at
$22.50.
What was the % of discount?
(% of decrease)
$ = % change
$22.50
Change = % decrease
Original
Discount ~ 47%

15. $2800 15% OFF .15(2800) = discount $420 = discount
All
Steps
$2800
15% OFF
.15(2800) = discount
$420 = discount
$2800(.85)= sale price
$ $420 = sale price
$2380 = sale price
$2380 = sale price
$2380(1.0925) = price+tax
$2380(.0925) = tax
$ = price
$ = tax
$ $2380 = price
Fewer
steps
$ = price

16. Previous Applications
Interest
Taxes
Percent of Change
Discounts and Markups
Today? Commission and tips

17. Working with Commission
Commission is an amount paid based on a percent of sales.
In your new position as sales manager, you will receive a salary of $500 per week and 15% of the sales that your department generates for your store.
How much would you expect to receive if your department sold $25,000 worth of merchandise during the week.
Pay = salary of sales
Pay = (25,000)
Pay = $ $3750
Pay = $4250

18. As a salesperson in an electronics store, you receive 12% of your sales for one month. You also get a monthly salary of $ How much would you have to create in sales to make $4500 for the month?
4500 = (sales)

19. You were disappointed in the sales of your department this month
You were disappointed in the sales of your department this month. The sales totaled $ This was just 65% of what you had expected. What sales amount had you expected this month? Round to the nearest dollar.
Write an equation………. “This” was(is) 65% of expected
3500 = .65(expected sales)
3500 = .65n
_____ _____
Now what?
$ = n
Real estate agents get a commission on homes they sell. The expected commission rate is 6%. If an agent sold a home for $200,000, what would their commission be?

20. Tips
Tips are normally paid to those in the service industry as recognition for
appreciation of a job well done!!!
Don’t forget the tax!!! 9.25%
Tips are normally based on the total of a bill.
The Billings family ate at their favorite restaurant.
The final bill came to $ The service was really
good, so Mr. Billings decided to leave an 18% tip.
.0925(56.75) = tax
What is 18% of 56.75?
.0925(56.75) = $5.25
.18(56.75) = tip amount
$10.22 = tip amount
What will they pay for
the dinner with the tip and tax
included?
Dinner $56.75
Tax
Tip
$72.22

21. Bill Total: $75.00 20% of $75 = tip .2(75) = $15.00
You and four friends go out to dinner. You have decided to
share the cost of the meal and the tip equally.
The food and service were both good! Everyone agrees to
leave a 20% tip!!!!! What will each of you have to pay for
the meal and tip?
Bill Total: $75.00
20% of $75 = tip
.2(75) = $15.00
$90 ÷ 5 = $18.00 each
$ $15.00 = total for all

22. Clean Clothes for You!!! $380 (.0925) = sales tax
This washing machine regularly sells for $ This Saturday it will be on sale for 20% off. What will the sale price be? What will the final cost be
after you add a 9.25% sales tax?
$380 (.0925) = sales tax
$ discount = sale price
$35.15 = sales tax
.20(475) = discount $
$ = final price
$95 = discount
$475.00
95.00
$ Sale Price
Don’t forget me!!!
$380(.12)= commission
$45.60 = commission
$475(.8)= price
$380 = price

23. Did we apply percent concepts to solve real-world problems?