Uses of percents Sales Commissions Sales commissions are paid to employees or companies that sell merchandise in stores or by calling

on customers. The commission is meant to motivate sales persons to sell more. A commission may be paid in addition to a salary or instead of a salary. A common place that commissions are paid is in real estate marketing. A commission is generally a percentage of the sales price of an item. For example, if a salesperson receives a 10% commission on their sales and sells $1500 worth of merchandise, they would earn $150 in commissions.

Price Discounts
Stores will often sell items for a discounted sales price. The store will discount an item by a percent of the original price. For example, an item that originally cost $20 may be discounted by 25%. To find the amount of discount calculate 25% of $20. ($20.00*25/100=$5.00) Subtract the discount from the original price to find the sale price. ($20.00$5.00=$15.00 sales price).

Terms you may see for discounted items are: 50% Off Save 50%

Markup
Stores buy items from a wholesaler or distributer and increase the price when they sell the items to consumers. The increase in price provides money for the operation of the store and the salaries of people who work in the store. A store may have a rule that the price of a certain type of item needs to be increased by a certain percentage to determine how much to sell it for. This percentage is called the markup. If the cost is known and the percentage markup is known, the sale price is the original cost plus the amount of markup. For example, if the original

cost is $4.00 and the markup is 25%, the sales price should be $4.00 + $4.00*25/100 = $5.00. A faster way to calculate the sale price is to make the original cost equal to 100%. The markup is 25% so the sales price is 125% of the original cost. In the example, $4.00 * 125/100 = $5.00.

Discounted by 50%

Simple Interest
When money is borrowed, interest is charged for the use of that money for a certain period of time. When the money is paid back, the principal (amount of money that was borrowed) and the interest is paid back. The amount to interest depends on the interest rate, the amount of money borrowed (principal) and the length of time that the money is borrowed. The formula for finding simple interest is: Interest = Principal * Rate * Time. If $100 was borrowed for 2 years at a 10% interest rate, the interest would be $100*10/100*2 = $20. The total amount that would be due would be $100+$20=$120. Simple interest is generally charged for borrowing money for short periods of time. Compound interest is similar but the total amount due at the end of each period is calculated and further interest is charged against both the original principal but also the interest that was earned during that period.

Total Price with Sales Tax and Tip

A tip or gratuity is an amount of money that is given to a worker such as a waiter or waitress who performs a service for you. A common tip amount is 15% of the cost of the meal or other service. Generally a tip is determined based on the total bill which includes the cost of the meal and sales tax. If a meal costs $10.00 and sales tax is 5% the bill is $10.50. A 15% tip based on the $10.50 cost would be $1.58. The total would be $10.50 + $1.58 = $12.08. In the next lesson we will find how to quickly estimate the amount of a tip.

Estimating a Tip
A tip or gratuity is an amount of money that is given to a worker such as a waiter or waitress who performs a service for you. A common tip amount is

15% of the cost of the meal or other service. Generally a tip is determined based on the total bill which includes the cost of the meal and sales tax. If a meal costs $10.00 and sales tax is 5% the bill is $10.50. A 15% tip based on the $10.50 cost would be $1.58. The total would be $10.50 + $1.58 = $12.08. To estimate the amount of a tip round the total bill to the most significant place value. A $16.75 meal would round to $20. Next, move the decimal point of the rounded amount one place to the left. This will be 10% of the total cost. Next divide this amount in half to determine 5%. Add the 10% amount and the 5% amount together to estimate 15% of the total. In this case, it would be a $2.00 + $1.00 = $3.00 tip.

Amount of Sales Tax

Many states and cities levy a sales tax on retail purchases. The sales tax is determined by finding a percentage of the purchase price. The percentage of tax called the tax rate varies between different cities and states. If the sales tax is 6% and a $10.00 purchase is made, the sales tax is $10.00*6/100 or $0.60.

Total Price with Sales Tax

Many states and cities levy a sales tax on retail purchases. The sales tax is determined by finding a percentage of the purchase price. The percentage of tax called the tax rate varies between different cities and states. If the sales tax is 6% and a $10.00 purchase is made, the sales tax is $10.00*6/100 or $0.60. The total sales price is $10.00+$0.60=$10.60.

Shipping and Handling

When a mail order is placed, a shipping and handling charge is often assessed to cover the packing and postage or shipping charges for getting the item to you. There is frequently a minimum charge that is the least you will pay for shipping and handling on small orders. If the order is more than the minimum, a shipping and handling charge is calculated as a percent of the total purchase price.

If the order is below the minimum, the minimum charge will apply. If the order is larger, the shipping and handling charge is a certain percent of the the purchase price. For example, if there is a minimum charge of $2.00 on orders less than $20.00 or 10% of the total order price, and your order is $35.00, the shipping and handling would be $35.00*10/100=$3.50. You would not pay the minimum charge because your order was more than $20.00. Your total cost would be $35.00+$3.50=$38.50.