Goodbye classes!! Welcome final exam????

huhuhu so sad...we have finished our classes...after learnt so many things in business math class i got so many knowledges in my life..i'm so happy cause I got sweet reminiscence with my friends and lecturers!! I love all of u!! I also happy to do my first blog...thanks to Miss Ch'ng..Miss,if you read my blog,I want you to know that I appreciate you very much..thanks for teaching me business math in this semester.. xiexie!!...i hope to see you again on the next sem...next week I will sit for the final exam..I will try my best in the final exam!!! please pray for my success!!! I hope you will always support me....hope to see u again..zaijian...

Compound Interest!!

Some important terms....

• original principal
• nominal interest rate
• interest period or conversion period
• frequency of conversions
• periodic interest rate
• number of interest periods in the investment period

S=P(1+i)n

I=S-P

consider the following examples:

Find the future value of RM1000which was investsed for

a)4 years at 4% compounded annually

b)2 years 3 months at 4% compounded quarterly

c)5 years 6 months at 14% compounded semi-annually

solution:

a)S=1000(1+(4%/1))4 =RM1169.86

b)S=1000(1+(4%/4)9 =RM1093.69

c)S=1000(1+(14%/2)11=RM2104.85

Woaa...I found out that this chapter is quite difficult..I hope that I will understand it even it is confusing huhuhu...

Bank Discount...

what is it??? does bank discount exist??? of course!! let's take a look...

D=Sdt

D=bank discount

S=amount of maturity value

d=discount rate

t =term of discount in years

P=S-D

P=S-Sdt

P=S(1-dt)

My father borrows RM9000 for four months from a bank that charges a discount rate of 10%.So, in calculating the bank discount the proceeds,I used this formula:

S=RM9000

d=10%

t=0.33 years

From D=Sdt,I get

bank discount=9000x0.1x0.33

=RM297

From P=S-D,I get

proceeds=9000-297

=RM8703

Promissory Notes???

A promissory note is a written promise made by one person or party to repay a loan or debt on a specified future date to another person or party.Look at this term..

• Maker(the person that signs the note)
• Payee(the person to whom the payment is to be made)
• Date of the note(the date on which the note is made)
• Term of the note(length of time)
• Face value(amount stated on the note)
• Maturity value(total sum of money the payee will receive)
• Maturity date(date on which maturity value is due)

So,after this it's better for us to make the prommissory note when another person want to borrow money from us so that there is no cheating!!

profit and loss...

Before look further into this subtopic,we must understand some of the terms:

operating expenses=OP

breakeven price=BE(no profit or loss is gain)

net price=NP

Gross profit=GP

so,the formula used is:R=C+NP+OE

Example:

A refrigerator was bought for RM4599.The operating expenses incurred in selling the

refrigerator totalled 30%of the cost.If the dealer made a net profit of 20% based on

cost,find

a) the selling price of the refrigerator

b) the gross profit

c) the breakeven price

d) the maximum markdown percent that could be offered so that there is no loss

or profit.

solution:

a) R=C+NP+OE

=4599+0.2(4599)+0.3(4599)

=RM6898.50

b) Gross profit=NP+OE

=0.2(4599)+0.3(4599)

=RM2299.50

c) Beakeven price=C+OE

=4599+0.3(4599)

=RM5978.70

d) Maximum reduction in price=retail price-breakeven price

=RM6898.50-RM5978.70

=RM919.80

Now,I found out that there is so interesting to start a business because there are profit,loss and many more that we can apply in our business..one day,when I run my own business,I will apply all of these in my business!!!

Markdown!!!

Markdown is a decrease in the selling price...


MD=markdown


OP=old retail price


NP=new retail price


%MD=(MD/OP)x100%


Example:


Due to Deepavali promotion,the markdown percent of a handbag is 20%.If the new


retail price is RM250,find the old retail price.


Solution:


Let the old price be RMx.From the formula,we get


20%=(x-250)/x


0.2x=x-250


-0.8x=-250


x=(-250)/(-0.8)


x=RM312.50

After look at the example that I provide,did u know why the prices are sometimes
marked down?? The reasons are:

• to encourages purchases in bulk
• to dispose off old stock
• to face stiff competition

Mark-up

now,we will learn about mark-up..

mArk-uP

cost price is the original price.The retailer must add an additional amount called mark-up to the cost to cover the business expenses and to generate profit.

R=retail price

C=cost price

M=mark-up

so,the formula is R=C+M

Example:

when I go to my uncle's furniture shop I was able to apply this formula...

The cost price of a set of dining table is RM2560. what is the retail price if the seller

wants a 35% mark-up based on

a) cost price

b) retail price?

Solution:

a) let the retail price be RM x. so,

R=C+M

=RM2560+0.35(RM2560)

=RM3456

retail price=RM3456

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b) let the retail price be x. so,

R=C+M

x=2560+0.35x

x-0.35x=2560

0.65x=2560

x=2560/0.65

x=RM3938.46

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test! test! test!!!!!

Huh!!! we have our second test today...I juz do what I know with lack of confidence...I don't know either I can score good mark or not..I'm so proud when I get the result for my first test..I hope my second test is not too bad huhuhu....Please pray for my succeess in the final exam..

Cash Discounts

is discount given to attract customer to pay earlier cash discount terms....

2/10,1/30,n/60

this term means 2% of net price maybe deducted if the invoice is paid within 10 days of the date of the invoice: 1% maybe deducted if paid between 11th and 30th day: and full amount must be paid by the both day.

ex: an invoice dated 11 March 2007 for RM 1100 was offered cash discount terms of 3/10,n/30.If the invoice was paid on 16 March 2007,what was the payment?

cash discount=3%(because the invoice was paid in 10 days)

Payment=RM 1100-(3% x 1100)

=RM 1067

Simple Interest

is the interest calculated on the original principal for the entire period it is borrowed or invested.

I=Prt

S=P(1+rt)

RM 12500 is invested for 5 years in a bank earning a simple interest rate of 15% per annum.Find the simple amount at the end of the investment period.

P=12500

r=15%

t=5 years

I=Prt

=12500(15%)(5)

=RM 9375

S=P(1+rt)

=12599(1+15%)(5)

=RM 21875

relax your mind...

look at diz pic..what do u feel????

Chain Discounts

when a chain discount is offered,the net price can be calculated more quickly by using the formula:

In calculating my raya shoes:

NP=L(1-r1)(1-r2)

L=RM 49.90

r1=20%

r2=25%

NP=49.90(1-20%)(1-25%)

NP=RM 29.94

Hmmm....after bought the shoes we went to Watson.There are also discount offer for every single items there.Since there are discounts for the items,I decide to buy Silky Girls product.The price is RM 13.90...After discount,it become.....

NP=L(1-r)

=13.90(1-10%)

=RM12.51

Yeah,now i'm glad that I have something new for the Hari Raya celebration!

Trade Discounts

-discount given to attract customer to buy products.

NP-net price

L- list price

r%-trade discount

Formula for calculating NP: NP=L(1-r)

on weekend,since we are so bored we decided to go to sunway carnival shopping mall.Woa...I found out that there are so many things that I want to buy especially the cutest shoes there!so,we went to one of the shop there.There are 20% discount for one pair of shoes.The list price of the shoes RM 39.90 so without hesitating I quickly applied what I have learn..

NP=L(1-r)

=39.90(1-20%)

=RM 31.92

this is my new blog....

this is my new blog....