Business Mathematics Week 2
Business Mathematics Week 2
Business Mathematics Week 2
MATHEMATICS
QUARTER II:
COMMISSION AND
INTEREST
I. Business Applications
When you work for a salary, you receive
the same amount of money each week or
month. When you work for commission,
you are paid a percentage of the total
sales you complete.
Commission = Commission rate × Sales
Example 1: Joshua’s sales commission rate is
6%. What is the commission from the sale of
₱2,630,000 worth of new car sales?
Solution:
C = 6% × ₱2,630,000
C = ₱157,800.00
Therefore, the commission is ₱157,800.00.
Example 2. A salesperson gets a commission for his sales
based on the following scale: 6% on all sales 5% on all
sales between ₱50,000 and ₱100,000 4% on all sales over
₱100,000 If his total sales was ₱150,000, what is his gross
pay?
Solution: First commission = 6% (₱150,000)
= 0.06 (150,000) = ₱9,000
Second commission = 5% (₱100,000 – ₱50,000)
= 0.05 (50,000) = ₱2,500
Third commission = 4% (₱150,000 – ₱100,000)
= 0.04 (50,000) = ₱2,000.
Therefore, his total commission, which serves as his gross
pay, is ₱9,000 + ₱2,500 + ₱2,000 = ₱13,500.
Example 3. A real-estate agent receives a 3%
commission of ₱300,000 for selling a house.
What was the price of the house?
Solution: ₱300,000 represents 3% of the total
cost of the house; that is, 3%(house cost) =
₱300,000.
Therefore, the price of the house =
₱300,000/.03 = ₱10,000,000.
II. Simple Interest
In business, capital is very important. However, not all business
owners always have enough capital to sustain their business. More
often than not, they have to borrow money for use in the business.
It is in this context that interest plays an important role.
Borrowers need to pay interest on the money that they borrow.
Interest is a fee paid for borrowing money or other assets. The
amount borrowed is called the principal. Rate (interest rate) is
the cost of using money expressed as a percentage of the principal
for a given period of time, which is usually per year. It is generally
regarded as the cost of borrowing or lending out money or the cost
of credit. Time is the term of period of the loan.
Two common types of interest are simple interest and compound
interest.
Simple Interest is computed on the principal
and then added to it.
Simple Interest Formula𝑰𝑺=𝑷𝒓𝒕
where𝐼𝑆= simple interest
P = principal, or the amount invested or borrowed