In this lesson we're going to learn about best buys. Best buys is when the same items have different price, you have no idea which one is cheap or best value for your money.
Let me tell you that it's not always a largest product or smallest or medium sized item. It matters on each price of each item. To find the price of each amount, you have to divide the total amount to the number of items.
For example "5 for 45c, 4 for $1, 3 for 99c. Find the best buy."
To find the best buy, 5 for 45c
= 45/5 = 1 for 9c
4 for $1
= 100/4
= 25
=1 for 25c
3 for 99c
= 99/3
=33
= 1 for 33c.
Therefore the answer is 5 for 45c.
Saturday, October 9, 2010
Profit and loss
In this lesson we're going to learn profit and loss.
Profit = Selling price - cost price
Loss = cost price - selling price
For example "Larry bought a game console for $330 then 3 years later he sold for $375. Find his profit and also find the profit in percentages.
Profit = $375 - $330 = $45.
Profit in percentage = profit/cost price x 100
= $45/330 x 100
= 14%
Another example is "brad bought a new mobile phone for $500. 4 years later he sold it for $230. Find his loss and also in percentage."
Loss = $500 - $230
= $270
Loss in percentage = Loss/cost price x 100
= $270/$500 x 100
= 54%
Profit = Selling price - cost price
Loss = cost price - selling price
For example "Larry bought a game console for $330 then 3 years later he sold for $375. Find his profit and also find the profit in percentages.
Profit = $375 - $330 = $45.
Profit in percentage = profit/cost price x 100
= $45/330 x 100
= 14%
Another example is "brad bought a new mobile phone for $500. 4 years later he sold it for $230. Find his loss and also in percentage."
Loss = $500 - $230
= $270
Loss in percentage = Loss/cost price x 100
= $270/$500 x 100
= 54%
Friday, October 8, 2010
Depreciation
In this lesson we're going to learn about depreciation. Depreciation means when something loses value.
For example "Deuce bought a new calculator 4 years ago for $200.
If it has depreciated by 15% p.a, what is it worth now?"
Decreased by 15% = 85% = x 0.85
Present value = $200 x 0.85 x 0.85 x 0.85 x 0.85
For example "Deuce bought a new calculator 4 years ago for $200.
If it has depreciated by 15% p.a, what is it worth now?"
Decreased by 15% = 85% = x 0.85
Present value = $200 x 0.85 x 0.85 x 0.85 x 0.85
= $200 x 0.85⁴
= $104
Shares
In this lesson we're going to learn shares. Shares are issued by companies for raise the operating the fund.
Also in shares we're going to learn Dividends and yields. These will tell you how to find the profits, price as in the percentage of the shares.
Dividend yield = Dividend/market value x 100
1. Our first example is " A company distributes all after their tax profit is $67.5 million. There are 1342 million shares in the company."
What we need to do is find the price of each share. We see both are million so we erase 6 zeroes.
Therefore $67.5÷1342 = 0.050298053
= $0.05 (5 cents per share)
2. Second example is "Find the dividend yield if the shares have a current market value of $1.30.
Dividend yield = 0.05/1.30 x 100
= 3.846153846
= 3.8%
3. Third example is "What's my dividend if i own 35000 shares?"
35000 x 0.05 = $1750
Next one we're going to learn is the brokerage fees. Brokerage fees are charged on all share transaction account (I.e purchases and sales.)
4. Forth example is "I bought a share to the value of $72000.
The broker charges 1.5% on the first $10000, 1.3% on the next $10000 and 1.1% on the next $10000 and 1.2% in excess of $13000.
Then I sell my shares at $75000.
(A) Find the brokerage fees that I must pay for this purchase.
(B) Find the profits after the brokerage fees.
(A) (1.5% x 10000) + (1.1% x 10000) + (1.2% x 59000)
= $968
(B) (1.5% x 10000) + (1.1% x 10000) + (1.2% x 62000)
= $1004
Profit = ($75000 - $72000) - 968 - 1004
= $1028
Also in shares we're going to learn Dividends and yields. These will tell you how to find the profits, price as in the percentage of the shares.
Dividend yield = Dividend/market value x 100
1. Our first example is " A company distributes all after their tax profit is $67.5 million. There are 1342 million shares in the company."
What we need to do is find the price of each share. We see both are million so we erase 6 zeroes.
= $0.05 (5 cents per share)
2. Second example is "Find the dividend yield if the shares have a current market value of $1.30.
Dividend yield = 0.05/1.30 x 100
= 3.846153846
= 3.8%
3. Third example is "What's my dividend if i own 35000 shares?"
35000 x 0.05 = $1750
Next one we're going to learn is the brokerage fees. Brokerage fees are charged on all share transaction account (I.e purchases and sales.)
4. Forth example is "I bought a share to the value of $72000.
The broker charges 1.5% on the first $10000, 1.3% on the next $10000 and 1.1% on the next $10000 and 1.2% in excess of $13000.
Then I sell my shares at $75000.
(A) Find the brokerage fees that I must pay for this purchase.
(B) Find the profits after the brokerage fees.
(A) (1.5% x 10000) + (1.1% x 10000) + (1.2% x 59000)
= $968
(B) (1.5% x 10000) + (1.1% x 10000) + (1.2% x 62000)
= $1004
Profit = ($75000 - $72000) - 968 - 1004
= $1028
Future value and present value
In this lesson we're going to learn future value and present value. Future value is value later and present value is the current value.
To find the future value, you have to multiply the current value by (1 + r)^n. Therefore the formula is current value x (1 + r)^n. If we look at the formula, the formula looks same as the compound interest formula. The reason is the formula for compound interest formula is same as the formula we just learned, and FV = PV(1 + R)^n is the generalized form for the compound interest formula.
FV = PV(1 + R)^n
FV = Future value
PV = Present value
R = Rate
n = Number of years.
For example is "A person invests $500 at 8% paid half yearly. what's the future value after 7 years?"
Now we know the present value is $500 and only the concern is paid half yearly.
This is what we do. 8% is the annual rate so we divide into half.
= $657.96
Therefore the answer is $657.96.
To find the future value, you have to multiply the current value by (1 + r)^n. Therefore the formula is current value x (1 + r)^n. If we look at the formula, the formula looks same as the compound interest formula. The reason is the formula for compound interest formula is same as the formula we just learned, and FV = PV(1 + R)^n is the generalized form for the compound interest formula.
FV = PV(1 + R)^n
FV = Future value
PV = Present value
R = Rate
n = Number of years.
For example is "A person invests $500 at 8% paid half yearly. what's the future value after 7 years?"
Now we know the present value is $500 and only the concern is paid half yearly.
This is what we do. 8% is the annual rate so we divide into half.
500 x (1 + 0.04)⁷
= 500 x (1.04)⁷= $657.96
Therefore the answer is $657.96.
Wednesday, October 6, 2010
Compound interest
In this lesson we're going to learn about the compound interest. Compound interest is when you invest your money on bank etc, you get a interest from them for investing your money. Instead of simple interest is you have to give the bank a interest when you're borrowing money from them.
To find the compound interest, you have to add the principal by interest by the number of year OR
in easy and time consuming, you can do this:
A = P(1 + R)N
A = Total amount of interest.
P = Principal.
R = Rate.
N= number of years.
For example "Find the compound interest earned if $12000 is invested for 5 years at 14% p.a if interest is compounded yearly. Answer to the nearest cent."
First I'll show you the original way to find the compound interest.
$12000 + 14% x 12000
= $13680
$13680 + 14% x 13680
= $15595.20
$15595.20 + 14% x $15595.20
= $17778.53
$17778.53 + 14% x $17778.53
= $20267.52
$20267.52 + 14% x $20267.52
= $23104.97
I.e interest earned = $23104.97 - $12000
= $11104.97
OR
= $23104.97
I,e $23104.97 - 12000
= $11104.97
* The formula for compound interest can be used for inflation.
To find the compound interest, you have to add the principal by interest by the number of year OR
in easy and time consuming, you can do this:
A = P(1 + R)N
A = Total amount of interest.
P = Principal.
R = Rate.
N= number of years.
For example "Find the compound interest earned if $12000 is invested for 5 years at 14% p.a if interest is compounded yearly. Answer to the nearest cent."
First I'll show you the original way to find the compound interest.
$12000 + 14% x 12000
= $13680
$13680 + 14% x 13680
= $15595.20
$15595.20 + 14% x $15595.20
= $17778.53
$17778.53 + 14% x $17778.53
= $20267.52
$20267.52 + 14% x $20267.52
= $23104.97
I.e interest earned = $23104.97 - $12000
= $11104.97
OR
$12000 x ( 1 + 14%)⁵
= 12000 x ( 1.14)⁵= $23104.97
I,e $23104.97 - 12000
= $11104.97
* The formula for compound interest can be used for inflation.
Puchasing by installment
In this lesson we're going to learn purchasing by installment or buying on terms. This lesson will tell you how to pay the bill divided equally to pay every month. Everyday every person uses the monthly payment such as credit card bill, bank mortgage etc.
To find the monthly payment, first is you have to find the deposit.
Second is find the balance owing.
Third is use the formula I = P x R x N / 100
to find the interest on the balance.
Forth is find the total amount still owing. I.e Balance + interest.
Fifth is Divide the total amount owing by the number of months over it is repaid.
Also there are terms you guys must know.
1. Cash price: Amount of stuff is worth if it is paid immediately.
2. Deposit: Paying the part of the whole amount owing.
3. Balance: Amount of debt still owing after paying the part of it.
4. Monthly installment: Paying the part of the debt equally every month.
For example "Roebuck bought a new car which the price is $35649. Roebuck pays a deposit 20% and agrees to pay the balance over 6 years at 22% p.a. What is his monthly installment?"
We're going to do it by steps because we need to find the deposit, balance and interest on the balance.
1) Find the deposit.
20% x $35649
= 20/100 x $35649
= $7129.80
2) Find the balance.
$35649 - 7129.80
= $28519.20
3) Find the interest in the balance.
Interest = $35649 x 22% x 6 /100
= $470.57
4) Find the total amount still owing.
[Balance + interest]
Total amount = $28519.20 + $470.57
= $28989.77
5) Divide the total amount owing by number of months.
Monthly installment = $28989.77 / 72
= $402.64
* Monthly installment could be known as loans.
To find the monthly payment, first is you have to find the deposit.
Second is find the balance owing.
Third is use the formula I = P x R x N / 100
to find the interest on the balance.
Forth is find the total amount still owing. I.e Balance + interest.
Fifth is Divide the total amount owing by the number of months over it is repaid.
Also there are terms you guys must know.
1. Cash price: Amount of stuff is worth if it is paid immediately.
2. Deposit: Paying the part of the whole amount owing.
3. Balance: Amount of debt still owing after paying the part of it.
4. Monthly installment: Paying the part of the debt equally every month.
For example "Roebuck bought a new car which the price is $35649. Roebuck pays a deposit 20% and agrees to pay the balance over 6 years at 22% p.a. What is his monthly installment?"
We're going to do it by steps because we need to find the deposit, balance and interest on the balance.
1) Find the deposit.
20% x $35649
= 20/100 x $35649
= $7129.80
2) Find the balance.
$35649 - 7129.80
= $28519.20
3) Find the interest in the balance.
Interest = $35649 x 22% x 6 /100
= $470.57
4) Find the total amount still owing.
[Balance + interest]
Total amount = $28519.20 + $470.57
= $28989.77
5) Divide the total amount owing by number of months.
Monthly installment = $28989.77 / 72
= $402.64
* Monthly installment could be known as loans.
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