WEEK 5     HOUSEHOLD ARITHMETIC (SIMPLE INTEREST, PROFIT AND LOSS, DISCOUNT AND COMMISSION)
PROFIT AND LOSS
When a trader buys or sells goods, the price at which he /she sells is called selling price while the price at which he/she buys is called cost price.
When the good is sold at a price greater than the cost price, then the trader has made a gain or profit. On the other hand, when the good is sold at a price less than the cost price, then the trader has made a loss.
S.P means selling price, C.P means cost price.
Profit = SP – CP        %P = P/CP * 100         LOSS = CP –SP        %L = L/CP *100
Example 1: a man buys a pair of shoe for Ħ3000 and sold it for Ħ3300. Find the percentage profit.
Solution:
SP = Ħ3300, CP = Ħ3000,
P = SP – CP = Ħ3300 – Ħ3000 = 300
%P = P/CP * 100 = 300/3000 * 100 = 30000/3000
= 10%
Example 2: a market woman bought 50 oranges at a total cost of Ħ2000. She sold each one at Ħ45. Find the percentage profit?
Solution:
CP = Ħ2000, SP = Ħ 45* 500 = Ħ2250,
P = SP – CP = Ħ2250 – Ħ2000 = Ħ250
SP = P/CP * 100 = 250/2000 * 100 = 25000/2000 = 12.5%
Ezample 3: A dealer bought an item for Ħ6000 after three months he sold it at a price of Ħ55000. What is the percentage loss?
Solution:
CP = Ħ60000, SP = 55000,
LOSS = CP – SP = Ħ60000 – Ħ55000 = Ħ5000
%LOSS = L/CP * 100 = 5000/60000 * 100 = 500000/60000
= 8.3%
Example 3:A dealer bought an article for Ħ65000. Find the price he will sell it in order to make a profit of 20%
Solution :
CP = Ħ65000, SP = ?, %P =20%
STEP 1: Find the % of the cost price
P = 20/100 * 65000 = 130000/100 = 13000
P = SP – CP = Ħ 13 000 = SP – CP = SP = Ħ 65000 + Ħ 13000 = Ħ 78000
SIMPLE INTEREST

 SI = P * R * T/100 where P principal, R = rate, T = time and SI = simple interest
Example 1: Mr Smith saves Ħ 70000 with a bank for 3 years at the rate of 5%.
(a). calculate the interest he will receive at the end of the years
(b). calculate the simple interest for 7 years
(c). what is the total amount he will save at the end of 5 years?
Solution:
P = Ħ 7000, R = 5%, T = 3
(a). S I = P * R * T/100 = 7000 * 5 * 3/100 – 700 * 15 = Ħ 10000
(b). S I = Ħ70000 * 5 * 7/100 = Ħ 700 * 35 = Ħ 24 500
(C). Ħ70000 * 5 * 5/100 = 700 * Ħ 17500
Amount = P + S I = Ħ 70000 + 17500 = Ħ 87500

 COMMISSION AND DISCOUNT
Commission is simply a payment received for selling a good.
Example 1: An insurance company pays an agent a basis salary of Ħ5000 per month plus a commission of 15% of all the sales above Ħ100000. Calculate his gross earning in a month if he sells good to the value of Ħ1 200,000.
Solution:
Basis salary = Ħ15000, commission = 15% 0f Ħ100000
But he sold 1200000, therefore Ħ 1200000 – Ħ100000 = Ħ1100000
15% of 1100000 = Ħ165000
Basic salary + commission = Ħ5000 + Ħ165000 = Ħ180000

 DISCOUNT is the amount of money taken of a price of a good in order to promote the sale.
Example: Mr adeoye, a regular customer is given a discount of 12% on an item that cost Ħ84500. How much does he pay?
Solution:
The item cost Ħ84500,12% of 584500
12% of 84500 – Ħ10140
He pays Ħ84500 – Ħ10140 = Ħ74360.
Example 2: A car company advertises a discount of 12.5% of all their vehicles. How much would it cost to purchase.
(a). a Toyota car priced at Ħ650000
(b). a Volvo car priced at Ħ450000
(c). a Peugeot car priced at Ħ360000
Solution:
(a). Toyota car = 12.5% of Ħ650000 = Ħ81250
Therefore Ħ650000 – Ħ81250 = Ħ568750
(b). Volvo car = 12.5% of Ħ450000 = Ħ56250
Therefore Ħ450000 – Ħ56250 = Ħ393750
(c).Peugeot car = Ħ12.5% of Ħ360000 = Ħ313500
Ħ360000 – Ħ46500 = Ħ313500

 ASSESEMENT: ESSENTIAL MATHEMATICS BOOK FOR JSS 2
EXERCISE 6.7 NO 2(A, B, C), 3, 8, 12 AND 14. PAGE 76
EXERCISE 6.8 NO 6, 14, 16 & 19. PAGE 75
EXERCISE 6.10 NO 3, 4 AND 5. PAGE 77

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