consumer Arithmetic

Discount and tax

 Discount and Tax
 Discount  Tax
When an item is on When an item is
sale, the store is purchased a sales tax
selling the item for or valued added tax is
less, so this is called added to the marked
a discount. price of an item.
In Jamaica, it is called
General
Consumption tax
(GCT) which is 15%
 Discount and
Tax
 A boutique is offering a
 Find the amount of
15% discount for cash.
discount.
Calculate the cash price for
 A store sells a shirt for
a dress with a marked price
$24.95. They have it
on sale for 25% off. of $125.
How much is the
discount?

$6.24 $106.25
 Discount and Tax
1) A shopkeeper buys a stove from a manufacturer.
The shopkeeper sells the stove for $2500 at a profit
of 20%.
a. How much did the shopkeeper pay the
manufacturer for the stove?
b. If the shopkeeper gives a 10% discount for
cash, how much does a customer pay for the
stove?
c. If the shopkeeper sells the stove at a loss of
10% of the cost price, find its selling price.
2) An article is marked at $40 and sold at $36. What
percent discount was given?
 Tax
1) A coat is on sale for $76. The tax is 8%. What is
the amount of tax?

2) What is the price of the coat including the tax?

3) A refrigerator is priced at $2800 plus value

added tax (VAT) at 15%. How much does the
refrigerator actually cost the customer?

4) A refrigerator is priced at $1495 inclusive of

15% sales tax. What is the price exclusive of tax
(before tax)?
The customs duty on imported vehicles is 30% of the
imported price.
a. Calculate the customs duty on a car for which the
imported price is $8 500
b. Calculate the imported price of a bus for which the
amount paid, including customs duty is $15 600.
 Discount, sale price, tax…
 A pair of shoes is  Find the discount
on sale for 15% off and sale price.
of an original price
of $135. The sales
tax is 6.5%.  Find the tax and
total with tax.
Hire Purchase
 Hire Purchase is a system by which one pays for a thing in
regular instalments while having the use of it.

The cash price is the actual amount of money that is

exchanged when commodities are bought and sold in the real
world.

Instalment is a series of payments that a buyer makes instead

of a lump sum to compensate the seller.

Hire Purchase Price = Deposit + Total Monthly instalments

1. The cash price of a laptop is $1 299. It can be bought on
hire purchase by making a deposit of $350 and 10 monthly
payments of $120 each.
a. What is the TOTAL hire purchase price of the laptop?
b. How much is saved by buying the laptop for cash?
2. The cash price of a stereo set was $1,850. The hire
purchase price was 20% more than the cash price.
a. Calculate the hire purchase price
b. Calculate the number of months needed to buy the
stereo on hire purchase given that a down payment of
$500 and monthly installments of $215 each were
required.
Your school is refurbishing the administrative office. They
need 20 office chairs valued at $250,000. If bought on hire
purchase the school will be required to pay $1 down and
$6,200 for 48 months.

What is the hire purchase price of the chairs?

How much money would the school save if they bought the
chairs cash versus hire purchase?
 Simple Interest,
Compound Interest,
Appreciation and
Depreciation
 Simple Interest
Interest is the profit return on investment or loan.

Principal (P) – the original amount of money

which is invested or lent or borrowed.

Interest Rate (R) – perventage return

Time (T) – period of investment/loan expressed in

years.

Amount (A) - total sum of money which remains

invested or to be re-paid after the period of time
Simple Interest =

, ,

Amount = Principal + Interest

 Questions

1. Amy took a renovation loan of $27 000 from a finance

company which charges a simple interest of 4% p.a.
a. How much interest does she have to pay if the loan
period is 3 years?
b. How much is each monthly instalment?

2. $700 is invested at 4% per annum. How long will it take

for the amount to reach $784?

3. Mr. Taylor invests $60 000 in a bank which pays a

simple interest of 4% p.a. After 9 months, he withdraws
all his money. How much does he receive altogether?
4. The simple interest on $15 000 for 4 years is
$8100. Calculate the rate percent per annum.

5. How long will it take Amy to withdraw $10200

from her savings account if she originally invested
$8500 at 4% interest.
 Compound Interest

Compound interest is different from simple interest in

that the interest which is added to the principal also
attracts interest.

Most banks and finance companies use the compound

interest method to calculate interest.

There is a formula to help to find the compound interest

but it is not required by CXC, however it makes
calculation much easier and quicker.
Mrs Tan deposits $10 000 in a bank for 2 years that pays an
interest of 5% compounded annually. Calculate the:
a) Total amount at the end of the 2 years
b) The interest for the 2 years

Interest at the end of 1st year =

Amount at the end of 1 year = $ 10 000 + $500

Interest at the end of 2nd year =

Amount at the end of 2 years = $10 500 + $525

Interest for the 2 years =

Using the formula, which is

P = $10 000 r = 5% t or n = 2

Amount at the end of 2 years =

Interest for the 2 years = Amount – Principal

1. Calculate the compound interest on investing
$12000 for 3 years at 8% per annum.

2. Calculate the total amount and the compound

interest on investing $5600 for 4 years at 5% per
annum.
 Depreciation

Assets such as cars, machines, buildings, furniture, etc,

have a limited number of years of useful life. These assets
lose part of their worth to wear, age and other causes. This
is called depreciation.

Book value or the value of the asset at the end of the period =
n
 r 
A  P1   Depreciation = P - A
 100 
 Question 1
(a)A Honda civic was bought in January 2005 for $270,
000. An insurance company decided to calculate its
depreciation per annum as 5%. Determine:
(i) the book value after 3 years

(ii)the amount by which it depreciates for the same

period.

Question 2
(a)A man bought a bike for $603, 200. After using it for two
years, he decided to trade in the car. The company estimated
a depreciation of 10% for the use of the first year and 15%
in the second year. Calculate the value of the car after two
years as well as the depreciated amount.
 Appreciation

The opposite of depreciation is appreciation, where

assets such as rare artifacts increase in value with time.
The compound interest formula can be used to
calculate appreciation.

Example:
Mr. Desmond bought a piece of land for $1 500 000. Its
value appreciates by 5% each year.
How much is it worth after 3 years?
1.A DVD player can be purchased cash for $3, 475 or on hire
purchase for a deposit of 25% and 24 equal monthly
instalments of $130. Determine for the DVD player:
a. The hire purchase price
b. The interest charged
c. The percentage interest charged

2. (Textbook) A freezer can be bought on hire purchase by

making a deposit of 20% on the marked price which is
$3000. 15% interest is then charged on the outstanding
balance. The balance is paid in 12 equal monthly
instalments. Calculate:
a) the deposit
b) amount of each instalment
c) The hire purchase price
d) If a discount of 12% is given for cash , calculate the
difference between the hire purchase price and the
Wages and Salaries
Salary is a fixed amount of money each month for services
rendered.

Gross Monthly salary =

Gross Annual salary =

Net Salary = Gross Salary – Taxes

Textbook page 170 Exercise 5a, # 5, 8, 15
 Wages
Basic Rate – this is the hourly pay

Basic Week – the normal hours worked in a week

Basic Wage – Basic Rate Basic Week

Overtime
- This is the extra hours worked and is paid at a higher rate
than the basic rate.

Overtime Rate = Multiplier of overtime Basic Rate

Overtime Wage = Overtime Rate Overtime hours

worked

Gross Wage = Basic Wage + Overtime Wage

1. A man works a basic week of 40 hrs at a basic rate
of $10 per hour. He works overtime on Friday for 2
hrs for which he is paid at time and a half. He also
works Saturday for 3 hrs for which he is paid double
time. What was his weekly wage?

2. James has a job for which

• the basic rate is $25 per hour
• the overtime rate of pay is $36 per hour
This week, James earned $1377. He worked 7 hours
overtime.
(a)  Calculate the amount he earned at the basic rate.
(b)  Calculate the number of hours that he worked at
the basic rate.
(c)  James noticed that his earnings of $1377 showed
a decrease of 10% of his last week’s 
      earnings. Calculate his earnings last week.
3. The basic wage rate for a technician for a 42-hour week
is $36.40 per hour. Calculate the technician’s weekly wage.

(ii)  For overtime work, the technician is paid one and a half
times the basic hourly rate.  Calculate the technician’s total
wage for 58 hours of work.
(iii) In a new wage agreement, the basic rate of payment is
$1490 for 36 hours of work. Calculate
• the technician’s hourly rate of pay
• the percentage increase in the hourly rate

4. Mr. Jones works for a basic wage of $15 per hour for
a 40-hour week.
(i)   If Mr. Jones worked only 40 hours during a
particular week, what was his wage for the week?
(ii)  Mr. Jones’ wage for the next week was $960. If
overtime is paid at double time, how many hours
overtime did he work?
Utilities Bills
Utilities bills are typically - Electricity, Water,
Telephone, Cable and Internet

Utility Bill can be a combination of

 Fixed charges – such as rental of equipment or a
fixed fuel charge
 Variable charges – calculated based on the amount
of usage of the service ( a per unit rate is charged by
the company).

 Some companies calculate bills based on a

minimum charge for the first number of units used
and a further charge for use of additional units.

 Electricity is charged for according to the

John’s monthly electricity bill is based on the number of
KWH of electricity that he consumes for that month. He is
charged $5.10 per KWH of electricity consumed. For the
month of March 2017, two meter readings are displayed in
the table below.
 
Meter Reading (KWH)
Beginning 01 March 0 3 0 1 1
Ending 31 March 0 3 3 0 7

a) Calculate the TOTAL amount that John pays for

electricity consumption for the month of March 2017.

b) For the next month, April 2017, John pays $2351.10 for
electricity consumption. Determine his meter reading at the
end of April 2017