What is Discount?
Discount is a reduction in the selling price of an item. It is usually expressed as a percentage of the Marked Price (MP) or List Price.
Important Terms:
- Marked Price (MP): The original price printed on the item
- Discount: The amount subtracted from MP
- Selling Price (SP): The actual price paid after discount
Formulas:
| Concept | Formula |
|---|---|
| Discount Amount | MP × \(\frac{\text{Discount%}}{100}\) |
| Selling Price after Discount | MP - Discount = MP × \((1 - \frac{\text{Discount%}}{100})\) |
| Discount Percentage | \(\frac{\text{Discount}}{MP} \times 100\%\) |
What is Simple Interest?
Simple Interest (SI) is the extra money paid for borrowing money or earned on savings. It is calculated only on the original principal amount.
Key Terms:
- Principal (P): The initial amount borrowed or invested
- Rate (R): Interest rate per year (as percentage)
- Time (T): Time period in years
- Simple Interest (SI): Interest earned/paid
- Amount (A): Principal + Interest
Simple Interest Formulas:
| Concept | Formula |
|---|---|
| Simple Interest | \(SI = \frac{P \times R \times T}{100}\) |
| Amount | \(A = P + SI = P(1 + \frac{RT}{100})\) |
| Principal | \(P = \frac{SI \times 100}{R \times T}\) |
| Rate | \(R = \frac{SI \times 100}{P \times T}\) |
| Time | \(T = \frac{SI \times 100}{P \times R}\) |
Real-life Applications:
- Bank loans and mortgages
- Savings accounts interest
- Festival sales discounts
- "Buy one get one" offers