Consumer Applications Flashcard Review

Front

What is simple interest and how is it calculated?

Back

Simple interest is calculated using the formula: Interest = Principal x Rate x Time. It is the interest calculated only on the principal amount borrowed or invested.

Front

If Jerry borrowed $4,000 at a 6% simple interest rate for 5 years, how much interest will he pay?

Back

He will pay $1,200 in interest.

Front

What does it mean to subtract a discount from a price?

Back

Subtracting a discount means reducing the original price by a certain percentage or amount, resulting in a lower final price.

Front

If an item costs $85 and is on sale for 40% off, how do you calculate the sale price?

Back

To calculate the sale price, first find the discount amount (40% of $85 = $34), then subtract the discount from the original price ($85 - $34 = $51).

Front

What is markup and how is it applied to a price?

Back

Markup is the amount added to the cost price of goods to cover overhead and profit. It is added to the original price to determine the selling price.

Front

How do you calculate percent change?

Back

Percent change is calculated using the formula: Percent Change = ((New Value - Old Value) / Old Value) x 100.

Front

If Ms. Alvey had 30 students this year and 27 last year, what is the percent change in the number of students?

Back

The percent change is 11%.

Front

What is the formula for calculating the total amount after applying simple interest?

Back

Total Amount = Principal + Interest.

Front

What is the difference between discount and markup?

Back

Discount reduces the price of an item, while markup increases the price of an item.

Front

How do you find the original price before a discount is applied?

Back

To find the original price, divide the sale price by (1 - discount rate). For example, if the sale price is $51 after a 40% discount, the original price is $51 / (1 - 0.40) = $85.