Business Math and Calculations Flashcards

Using the simple interest formula I = PRT, calculate the interest on a $5,000 loan at 6% annual interest for 90 days (use a 360-day year).

Answer: $75.00

$5,000 × 0.06 × (90 ÷ 360) = $5,000 × 0.06 × 0.25 = $75.00.

A product that costs $40.00 is marked up by 25%. What is the selling price?

Answer: $50.00

$40.00 × 1.25 = $50.00.

An item is on sale for $68.00, which is 20% off the original price. What was the original price?

Answer: $85.00

The sale price represents 80% of the original; $68.00 ÷ 0.80 = $85.00.

A company borrows $10,000 at 8% annual interest for 6 months. How much simple interest will be owed?

Answer: $400

$10,000 × 0.08 × (6 ÷ 12) = $10,000 × 0.08 × 0.5 = $400.

A company purchases 500 units at $3.50 each and receives a 10% trade discount. What is the net cost?

Answer: $1,575.00

List price: 500 × $3.50 = $1,750.00; discount: $1,750.00 × 10% = $175.00; net: $1,750.00 − $175.00 = $1,575.00.

An accounts receivable balance of $12,000 increases by 15% over the prior month. What is the new balance?

Answer: $13,800

$12,000 × 1.15 = $13,800.

Which formula correctly calculates the percent of increase between two values?

Answer: (New Value − Old Value) ÷ Old Value × 100

Percent of increase = [(New − Old) ÷ Old] × 100, which expresses the change relative to the starting value.