Arithmetic - Unit 2

Contents:



1. Profit and Loss:



To understand, Profit and Loss, we will need to know about Cost Price and Selling Price first.

Cost Price, abbreviated as C.P. is the exact amount that any buyer spends to buy an item or article or services. 

Selling Price, abbreviated as S.P. is the total amount any buyer sells a previously bought item, articles or services to a new buyer. 

When the bought item is sold again by the buyer to another buyer, the previous buyer receives a profit or loss in the trade of that article, item or service. 

The surplus amount one gains by selling a bought item or service is called Profit. It is also written as P. Mathematically, Profit = S.P. - C.P.

The amount one looses by selling a bought item or service is called Loss. It is also written as L. Mathematically, Loss = C.P. - S.P.

Profit or loss percentage is the profit or loss amount divided by C.P. and multiplied by 100%.


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Some Important Formulae of Profit and Loss:

Profit = S.P. - C.P.
Loss = C.P. - S.P.
Profit Percentage = Profit / C.P. * 100%
Loss Percentage = Loss / C.P. * 100%

S.P. = (100+ Profit %) * CP /100
S.P. = (100 - Loss %) * CP /100

C.P. = (100 * SP) /(100- Loss %)
C.P. = (100 * SP)/(100 + Profit %)


2. Commission and Tax:



Commission:

Commission is some percentage value of sales given to the middle man who works as a link between the buyer and seller in a trade. Due to the commission given to the agent or middle man, the total amount (money) received by the seller on the sales gets reduced

Here are the important formulae:

Commission amount = Commission Rate /100 * Sales Amount
Commission Rate = Commission/Sales Amount * 100%
Total sales received by businessman = Total sales - Commission amount

Discount:

The amount reduced or deducted from the Marked price or tagged price of an article while selling is known as discount

Remember, discount is always reduced from the Marked Price (M.P.) of an article. When we deduct the discount from M.P., we get the Selling Price (S.P.) of the article.

Here are some important formulae:

Discount amount = Discount % of M.P.
Discount rate = Discount / M.P. * 100%
Selling Price = M.P. - Discount amount



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Taxation:

The word 'tax' is derived from the Latin word 'taxare' meaning to estimate

Determination of income tax of an individual also depends on his/her marital status. 

The tax imposed by the government on the income of a person is called Income Tax.

In some sources of income, tax is exempted completely or to some extent. For example: no tax is exempted on the money received as a gift, bequest, inheritance or scholarship. 

Whenever, we are calculating the tax, first of all make sure that the rate of tax and the income amount are in the same units of time. Like: month, year, etc.

Some Important Formulae:
Tax Amount = Tax% of Total Amount
Taxable Amount = Total Amount - Tax emempted amount
Tax Rate = Tax / Total Amount * 100%

Dividend:



When an organization or a company is formed, many people invest shares on the company and become shareholders

After the company becomes established and starts earning profit, some percentage of the net income of the company is divided among the shareholders which is called dividend

The rate of dividend is specified by the company and can differ from company to company.


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Some Important Formulae:

Total Dividend = Rate of Dividend * Annual Profit
Rate of Dividend = Total Dividend /Annual Profit * 100%
Dividend for each share = Total Dividend / Number of Shares
Total Shares = Total Dividend / Dividend for Each Share

HouseHold Arithmetic:



The calculation of amount of the services that we use is called household arithmetic. Under this, Telephone Bill, Electricity Bill, Water Bill and Taxi Fare are the important ones.

Telephone Bill :

The telephone bill depends on the number of calls made, duration of call, when was the call made, TSC, and VAT.

Remember, the initial amount calculated only by multiplying the number of calls made and the rate of calls, is called subtotal amount. When TSC (Telephone Services Charges) is added to the subtotal amount, you receive Total Amount and when VAT is added to the total amount, you receive Grand Total Amount.

Therefore, Some Important Formulae are:
Subtotal Amount = Number of Calls * Rate of Calls
Total Amount = Subtotal Amount + TSC% of Subtotal Amount
GrandTotal Amount = Total Amount + VAT% of Total Amount

Taxi Fare:

In taxi fare, you need to understand the minimum charge, waiting charge and charge for every 200m.

Minimum charge is the amount that is charged by the taxi driver for hiring it. Depending on the time (day or night), the minimum charge varies.

When you have booked a taxi for 10 o'clock (for example), and you reach at 10:02 then, you have to pay the waiting charge of 2 minutes. Similarly, the more time you let the taxi wait, the more charge you have to pay. This amount is fixed in every places.

The charge for every 200m you travel is already fixed. Suppose, you travelled 2km. This means you travelled 2000m which is equal to 10*200m. So, you have to pay the amount as 10* rate for every 200m.

Total Taxi Fare = Minimum Charge + Waiting Charge + Charge for every 200m + Tips (Additional)

Water Bill:

The water bill of your home depends on the usage of water in  and the diameter of the pipe used. 

Some Important Terms:
1 unit = 1 kilolitre of water = 1000 litre

The Association related to usage of water will already have fixed the amount for different diameter of pipes you use. This is variable so, we advise you to learn from your book.


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Electricity Bill:

Electricity Bill depends on the total units consumed.

Some Important Terms:
1 unit = 1 kilowatt /hour = 1000 watt/hour

The Association related to usage of electricity will already have fixed the amount of units used based on the Ampere of the meter. This is variable so, we advise you to learn from your book.

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