Lesson 20 Vocabulary

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Simple Interest

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A quick method of calculating the interest charge on a loan. It is determined by multiplying the principal by the rate by the time invested (usually in years).

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Commission

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A service charge assessed by a broker or investment advisor, often as a percent of the total cost.

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Gratuity

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A sum of money given to someone as a reward for their services, often known as a tip.

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Markdown

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A reduction from the original or previous price of an item.

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Markup

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The amount added to the cost price of goods to cover overhead and profit.

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Tax

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A percent of income or of the cost of a good or service in order to fund government spending and various public expenditures.

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Percent

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Per 100. A percent is part or other object per hundred.

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Proportional Relationship

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A relationship between two quantities where the ratio of one quantity to the other quantity is constant.

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Rate

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A ratio that tells the number of units of one quantity for 1 unit of another quantity.