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MODULE 4MODULE 4Business-related Business-related
MathematicsMathematics
Chapter 20Principles of Financial Mathematics
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20.1 Percentage Change20.1 Percentage Change
A percentage increase or decrease is the amount of the increase or decrease expressed as a percentage of the original value.
Percentage change = amount of change X 100
original value 1
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Calculating the amount of the Calculating the amount of the discount and the new pricediscount and the new price
Discount = Reduction in original price/value
If an r% discount is applied, then:
discount = r x original price 100 1
New price = original price – discount = (100 – r) x original price
100 1 Refer to Example 1 page 524
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Calculating the amount of the Calculating the amount of the increase and the new priceincrease and the new price
Mark Up = Increase in original price/value
If an r% increase is applied, then:
increase = r x original price 100 1
New price = original price + increase = (100 + r) x original price
100 1Refer to Example 2 page 524
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Calculating the amount of the Calculating the amount of the increase and the new priceincrease and the new price
Mark Up = Increase in original price/value
If an r% increase is applied, then:
increase = r x original price 100 1
New price = original price + increase = (100 + r) x original price
100 1Refer to Example 2 page 524
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Percentage discount = discount x 100 original price 1
or
Percentage increase = increase x 100 original price 1
Refer to Example 3 page 525
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Calculating the original priceCalculating the original price
Sometimes we are given the new price and the percentage increase or decrease (r %), and asked to determine the original price.
This can be done by rearranging the formulas for the new price to make the original price the subject.
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When an r% discount has been applied:
Original price = new price x 100 1 ( 100 – r )
When an r% increase has been applied:
Original price = new price x 100 1 ( 100 + r )
Refer to Example 4 page 526
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