Page 520 - Basic College Mathematics with Early Integers

CHAPTER HIGHLIGHTS 497

Definitions and Concepts Examples
Section 6.5 Percent and Problem Solving: Sales Tax, Commission, and Discount (continued)

The total price is
total price = purchase price + sales tax
T T T
total price = $42 + $3.78
= $45.78
COMMISSION A salesperson earns a commission of 3%. Find the com-
mission from sales of $12,500 worth of appliances.
#
commission = commission rate total sales
commission = commission rate # sales
T T T
commission = 3% # $12,500
#
= 0.03 12,500
= $375
DISCOUNT AND SALE PRICE A suit is priced at $320 and is on sale today for 25% off.
What is the sale price?
#
amount of discount = discount rate original price
amount of
sale price = original price - amount of discount = discount rate # original price
discount
T T T
amount of
= 25% # $320
discount
#
= 0.25 320
= $80
amount of
sale price = original price -
discount
T T T
sale price = $320 - $80
= $240
The sale price is $240.

Section 6.6 Percent and Problem Solving: Interest

SIMPLE INTEREST Find the simple interest after 3 years on $800 at an inter-
est rate of 5%.
#
#
interest = principal rate time
interest = principal # rate # time
where the rate is understood to be per year.
T T T T
interest = $800 # 5% # 3
#
#
= $800 0.05 3 Write 5% as 0.05.
= $120 Multiply.
The interest is $120.
Compound interest is computed not only on the principal, $800 is invested at 5% compounded quarterly for
but also on interest already earned in previous compound- 10 years. Find the total amount at the end of 10 years.
ing periods. (See Appendix A.7 for various compound 4 10
#
0.05
interest factors.) A = $800a1 + b
4
r n . t 40
A = Pa1 + b = $800A1.0125B
n
L $1314.90
where n is the number of times compounded per year.