QUANTITATIVE TECHNIQUES FOR

BUSINESS
PERCENT
 Markdown on an older-model iPhone is 10% of the
original price.
 Interest rate on a certificate of deposit is 2% of amount
on deposit.
 Sales taxes in one city are 8.5% of the total.

 Real estate commission is 6% of the selling price of a

house.
 Unemployment is 4.5% of the workforce.
DECIMALS AND FRACTIONS AS
PERCENTAGES
BRAIN TEASER
 Change the following decimals to percent
PERCENTAGE PROBLEM
EXAMPLE:
 Tom Dugally finds a house purchase for $210,000. A 6%
real estate commission must be paid. The $210,000 price
of the house is the whole (or base), and the 6%
commission is the rate. The unknown is the actual
commission, which is the part. Find the commission .
EXAMPLE
PERCENTAGE PROBLEM
 Finding Base of Percentage
 A lender qualifies the Abriana family for a home loan
with a monthly payment of $1386 or 28% of their
income. Substitute these values into the following form
of the percent equation to find monthly income
 One week, an athletic shoe store collected sales taxes of
$780. If the sales tax rate is 5%, find total sales for the
week
 Roberta Gonzales received $162.50 in interest from an
investment that paid 1.25% interest for the year. Find the
amount of money invested in the account.
PERCENTAGE PROBLEM
 Finding Rate

 An investment officer at Graham Bank placed

$3,000,000 in a government security. It remained there
for one year and earned $48,000 in interest. Find the rate
of return.
 Sheila Jones is running a marathon (26.2 miles) but is
exhausted after 22 miles. Find the percent of the race
that she must still run.
INCREASE AND DECREASE PROBLEMS
 Increase problem. The base (100%) plus some portion of the
base gives a new value, which is the part. Phrases such as after
an increase of, more than, or greater than often indicate an
increase problem. The basic formula for an increase problem is
Original + Increase = New value
(base) (part)
 Decrease problem. The part equals the base (100%) minus some
portion of the base, giving a new value. Phrases such as after a
decrease of, less than, or after a reduction of often indicate a
decrease problem. The basic formula for a decrease problem is
Original - Decrease = New value
(base) (part)
INCREASE AND DECREASE
 The value of a home sold by Tom this year is $203,500,
which is 10% more than last year’s value. Find the value
of the home last year.

 After Nike deducted 10% from the price of a pair of

competition running shoes, Katie Small paid $135. What
was the original price of the shoes?

 The total sales at Office Products this year are $713,340,

which is 35% more than last year’s sales. What is the
amount of last year’s sales?
EQUATIONS AND FORMULA
APPLICATION OF EQUATION
CONT.
BRAIN TEASER
 Write “the sum of an unknown and 6, when divided by
15, is equal to 7” as an equation, using r as the variable.

 Ben James is studying monthly demand for Chevrolet

Impalas in two different regions of the country. He has
14,200 new Impalas to ship to the two regions, and he
decides to ship 3350 more to the Southeast region than to
the mid–Atlantic Coast region. Find the number to be
shipped to the mid–Atlantic Coast region.
BRAIN TEASER
 Zimmerman has $15,000 to invest. She places a portion of the
funds in a savings account and $3000 more than twice this
amount in a retirement account. How much is put into the
savings account? How much is placed in the retirement
account?

 The Eastside Nursery ordered 27 tree seedlings. Some of the

seedlings were elms, costing $17 each. The remainder of the
seedlings were maples at $11 each. The total cost of the
seedlings is $375. Find the number of elms and the number of
maples.
RATIO AND PROPORTION
 A ratio is a quotient of two quantities that is used to
compare the quantities. The ratio of the number a to the
number b is written in any of the following ways.
a to b, a:b, a b
 All are pronounced “a to b” or “a is to b.” The third way
shown of writing a ratio is most common in mathematics,
while a:b is perhaps more common in business.
BRAIN TEASER
Burger King sold the following items in a one-hour period last
Friday afternoon.
 70 bacon cheeseburgers

 15 plain hamburgers

 30 salad combos

 45 chicken sandwiches

 40 fish sandwiches

Write ratios for the following items sold:

 bacon cheeseburgers to fish sandwiches

 salad combos to chicken sandwiches

 plain hamburgers to salad combos

 fish sandwiches to total items sold

BRAIN TEASER
 A food wholesaler charges a restaurant chain $83 for 3 crates
of lettuce. How much should it charge for 5 crates of lettuce?
 A firm in Hong Kong and one in Thailand agree to jointly
develop an engine-control microchip to be sold to North
American auto manufacturers. They agree to split the
development costs in a ratio of 8:3 (Hong Kong firm to
Thailand firm), resulting in a cost of $9,400,000 to the Hong
Kong firm. Find the cost to the Thailand firm.
 Three partners of firms divide the profit of 6720 in the ration
of 2:3:7. How much is the biggest share of profit?
Mathematics of buying
TRADE DISCOUNTS
 Firms often give discounts to businesses that buy products. The
seller provides a list price but then often offers a trade
discount that is subtracted from the list price, resulting in a net
price paid by the purchaser.
Net price = List price - Trade Discount
The list price of a commercial-grade food processor is $189.20
with a trade discount of 25% given to Bed Bath & Beyond due to
the volume of purchases. Find the net price.
Trade discount = 25% of $189.20 = $47.30
Net price = List price - Trade discount
= $189.20 - $47.30
= $141.90
SERIES OF DISCOUNTS:
 Sometimes two or more discounts are combined into a
series discount, also called chain discount. The three
common methods used to calculate a series discount are
shown in the next objectives.
 1. The first method requires the discounts to be
calculated separately.
 Use complements to calculate series discounts.
Complements can also be used to find series discounts.
The complement of a discount is found by subtracting
the decimal form of the discount from 1 as shown.
FIRST METHOD

 Bed Bath & Beyond is offered a series discount of 20/10

on a Cooking with stainless steel cookware set with a list
price of $150. Find the net price after the series discount.
SOLUTION
 Apply the first discount in 20/10, which is 20%.
 Discount = 20% of list price of $150 = $30

 Amount after first discount = $150 - $30 = $120

 Now apply the second discount in 20/10, which is 10%.

Importantly, apply the discount to the amount after the
first discount, or $120.
 Discount = 10% of discounted price of $120 = $12

 Net cost = $120 - $12 = $108

 The net cost is $108

SECOND METHOD:
 Method of Complements.
Decimal Finding the
Discount Equivalent Complement Complement
10% .1 1 - .1 .90
20% .20 1 - .2 .80
25% .25 1 - .25 .75
30% .30 1 - .3 .70
62% .62 1 - .62 .38

 Kitchen Crafters is offered a series discount of 20/10 on

a George Foreman Grilling Machine with a list price of
$139.99. Find the net price after the series discount.
SOLUTION:
BRAIN TEASER:
 A 12-place setting of stainless steel flatware is list
priced at $249.99. If a series discount of 10/15 is
offered, what is the net price after the series discount
is taken?

 A supplier offers a series of discount of 25/15 on a

waffle iron. If the list price of the waffle iron is $135,
use the complement with respect to of each of the
single discounts to find
(a) the net price and (b) the amount of the discount.
SERIES DISCOUNTS AND SINGLE
DISCOUNT EQUIVALENTS
 Single discount equivalent = 1 - Net price equivalent
FINDING LIST PRICE
Mathematics of Selling
FEW TERMS
Recognize the terms used in selling
 The terms used in markup are summarized here.
 Cost is the amount paid to the manufacturer or supplier after
trade and cash discounts have been taken. Shipping and
insurance charges are included in cost.
 Selling price is the price at which merchandise is sold to the
public.
 Markup, margin, or gross profit is selling price minus cost.
 Operating expenses, or overhead, include the expenses of
operating the business, such as wages, rent for buildings and
equipment, utilities, insurance, and advertising.
 Net profit (net earnings) is gross profit minus operating
expenses.
MARKUP
 Managers mark up the cost of an item before selling it.
For example, REI pays $549.20 to buy a set of ski and
marks the price up by $126.70.

 The basic markup formula that follows shows that the

selling price is the sum of the cost and the markup.

Selling price= Cost + Markup
S = C + M
= $549.20 + $126.70
= $675.90
BRAIN TEASER
 Solve this example
MARKUP (ON COST)
 Markup on cost:
BRAIN TEASER
 A discount store bought hiking boots manufactured in
Mexico for $60 and sells them for $81 a pair. Find the
percent of markup based on cost.

 Anna’s Sporting Goods puts a markup on a dumbbell set

of $16, which is 50% of the firm’s cost. Calculate the
cost and selling price.

 Find the markup and the selling price for a belt if the
cost is $23.60 and the markup is 45% of cost.
MARKUP (ON SELLING PRICE)
 sell
AN EXAMPLE
EXAMPLE 2
BRAIN TEASER
 Marilyn Westby must calculate the markup on a Wilson
youth tennis racket. The selling price of the tennis racket
is $15.99, and the markup is 20% of selling price. Find
the markup.

 Find the markup on a dartboard made in England if the

cost is $27.45 and the markup is 25% of selling price.
MARK DOWN
 Reduced price = Original price - Markdown

 Anna’s Sporting Goods has reduced, or marked down,

the price of a home gym. Find the reduced price if the
original price was $2879 and the markdown is 30%.

 The total inventory of coffee mugs at a gift shop has a

retail value of $785. If the mugs were sold at reduced
prices that totaled $530, what is the percent of
markdown on the original price?
EXAMPLE
 Target offers a child’s car seat at a reduced price of $63
after a 25% markdown from the original price. Find the
original price.
MARKDOWN CONT.

Target offers a child’s car seat at a reduced price of $63

after a 25% markdown from the original price. Find the
original price.

 Breakeven point = Cost + Operating expenses

 Operating loss = Breakeven point - Reduced selling
price
 Absolute loss = Cost - Reduced selling price