Flashcard- Lesson 20 Simple Interest, Sales Tax, Commission, Discounts, Tips

Front

What is Simple Interest?

Back

Simple Interest is the interest calculated on the principal amount only, without compounding. It can be calculated using the formula I = P * r * t, where I is the interest, P is the principal, r is the rate of interest, and t is the time in years.

Front

What does the 'P' in the simple interest formula I = P * r * t represent?

Back

The 'P' represents the Principal, which is the initial amount of money that is invested or loaned.

Front

What does the 'r' in the simple interest formula I = P * r * t represent?

Back

The 'r' represents the rate of interest, expressed as a decimal.

Front

What does the 't' in the simple interest formula I = P * r * t represent?

Back

The 't' represents the time the money is invested or borrowed, typically measured in years.

Front

How do you calculate the commission earned from sales?

Back

To calculate the commission earned, multiply the total sales amount by the commission rate (as a decimal). For example, if the sales are $22,540 and the commission rate is 12%, the commission is $22,540 * 0.12 = $2,704.80.

Front

What is a discount?

Back

A discount is a reduction in the price of a product or service, often expressed as a percentage of the original price.

Front

How do you calculate the final price after applying a discount?

Back

To calculate the final price after a discount, subtract the discount amount from the original price. The discount amount can be calculated by multiplying the original price by the discount rate (as a decimal).

Front

If an item costs $20 and is on sale for 25% off, what is the sale price?

Back

The sale price is $20 - ($20 * 0.25) = $20 - $5 = $15.

Front

What is sales tax?

Back

Sales tax is a tax imposed by the government on the sale of goods and services, usually calculated as a percentage of the sale price.

Front

How do you calculate the total cost including sales tax?

Back

To calculate the total cost including sales tax, multiply the original price by the sales tax rate (as a decimal) and add that amount to the original price.