**Discounts and Markdowns*** *
N = L ( 1 - d )
[Net Price = List Price (1 - discount rate %)]
[or Sale Price = Regular Selling Price ( 1 - MD%]
[or Old Price - New Price ( 1 - MD%)]
N = L - D
[Net Price = List Price - Discount Amount $]
D = Ld
[Net Price = List Price x discount rate %]
** **
**Markup**
M$ = E + P
[Markup $ = Expense = Profit]
M$ = M% x P
[Markup $ = Markup % x Price]
M$ = S - C
[Markup $ = Selling Price - Cost]
S = C + M
[Selling Price = Cost + Markup $]
Markup of Cost Price = M/C
[Markup of Cost Price = Markup Value $ / Cost Price]
Markup of Sale Price = M/S
[Markup of Sale Price = Markup Value $ / Sale Price]
**Invoices Discount periods**
ROG - discount period starts after receipt of goods
EOM - discount period starts the end of the month
Amount Paid = Amount Credited ( 1 - discount rate%)
Amount Credited = Amount Paid / ( 1 - discount%)
Invoice Balance = Invoice Amount - Amount Credited
2/15, n/60 ROG
[discount rate/length of discount time period, total due date & type of discount period]
**Interest and Principal**
I = Prt; P = I / (rT) r = I / (Pt); t = I / (Pr)
[Interest = Principal x rate x time]
[time is always per year, i.e. / 12 mths, / 365 days, / 52 wks]
T = P + I
[Total Amount Due = Principal + Interest]
**Compound Interest**
S = P(1 + i )ⁿ
[S = future value; P = Principal;
I = interest rate for the time period;
n = number of periods]
P = S( 1 + i )‾ⁿ
i = j / m
[j = per annum (p.a.) interest rate;
m = number of periods per year]
**Equality (i.e focal date questions)**
FV = PV (1 + i )ⁿ
[use of the due date is earlier than the focal date]
PV = FV(1 + i )‾ⁿ
[ use of the focal date is earlier than the due date]
n = the number of periods between the due date and the focal date
i = j / m [same as in the compound interest questions]
**Original Simple Annuity**
Sn = R [( 1 + i )ⁿ - 1 ]
i
[R = size of periodic payments]
[Sn = future/maturity value; make sure Sn is the future or maturity value and not the original amount of money borrowed or invested]
An = R [ 1 - ( 1 + i )ⁿ ]
i
[An = present value of the annuity, i.e "in today's dollars']
[R = size of the periodic payments] |