I AM SAD.. =(

Me WiTh Miss Ch'Ng in The LAsT ClaSs.. SobS Sobs..=(

Hey.. I’m now at home.. So bored.. Math class was over.. I am going to miss math class and also my beloved lecturer, Miss Ch’ng.. Miss Ch’ng.. Dun forget me.. I want to thank you for giving me those precious lessons and taught me VERY VERY VERY well… HE HE.. So I hope I can do well in my final exam.. Pray for me Miss Ch’ng.. Don’t forget ok.. I will miss the surroundings and how I learn in math class. Business Math is one of my favourite subject. Although it is challenging, but it was happy.. If I study meth everyday, I’m sure I will see numbers in my dream when I sleep.. 1, 2, 3, 4 and more.. God! Scary! Hehe.. But I like it! Ha Ha.. AhakS! Last but not least. Business Math is my world!

PROMISSORY NOTES

Promissory notes or notes in short are debt instruments.
A negotiable instrument is a signed documents that promises the bearer a stated sum of money at a future date or on demand.

MAKER
The maker (promisor or obligor) is the person that signs the note.

PAYEE
The payee (promise or oblingee) is the person to whom the payment is to be made.

DATE OF THE NOTE
The date of the note is the date on which the note is made.

TERM OF THE NOTE
The term of the note is the length of time until the note is due for payment.

FACE VALUE
The face value of the note is the amount stated on the note.

MATURITY VALUE
The maturity value of the note is the total sum of money which the payee will receive on the maturity date. The maturity value of a non-interest bearing note is the face value while the maturity value of an interest-bearing note is the face value plus any interest that is due.

MATURITY DATE
The maturity date of the note is the date on which the maturity value is due.

Promissory Note

RM2500.00 20 April 2005
Sixty days after date I promise to pay to the order of Ahmad Aizuddin.
Ringgit Malaysia : Two thousand five hundred only for value received with interest at the rate of 8% per annum until paid.
No : 1234 Date : 19 June 2005
Amir Marwan

Example :

In the promissory note above

a) Who is the maker of the note?

b) Who is the payee of the note?

c) Calculate the maturity value of the note.

a) Amir Marwan

b) Ahmad Aizuddin

c) Maturity value = face value + interest due

= 2500 + 2500 x 0.08 x 60/360

= RM 2533.33

MARK DOWN

Markdown is a decrease in the selling price. It is difference in the old retail price and the new retail price ; that is

MD = OP – NP

Where MD = mark down

OP = old retail price

NP = new retail price

Price are sometimes marked down due to many reasons ; to face stiff competition , to encourage purchases in bulk , to dispose off old, damaged or obsolete stocks and to close a line of merchandise. The markdown per cent, %MD, is based on old price OP and is expressed as follows.

%MD = MD/OP x 100%

Example:

The markdown per cent on TV set is 10%. If the new retail price is RM900, find the old retail price.

Solution :

Let the old price be RM S.

From %MD = MD/ OP X 100%, we get

10% = K – 900/K

0.1 K = K – 900

K – 0.1 K = 900

K = RM 1000

Mark down.. Hurm... So far so good.. But sometimes it’s confusing.. I don’t really like this topic… I have to practice more.. Preparation for final exam! GO GO! I hope I will Not die because of math.. Ha ha!

BANK DISCOUNT

BANK DISCOUNT is interest on a loan, deducted in advance from the face value of the note.

The formula is D=Sdt
where D = bank discount
S = amount of maturity value
d = discount rate
t = term of discount in years

The proceeds: Bank proceeds = maturity value - bank discount or P = S ( 1 - dt )

Example:
Aisha borrows RM8000 for three months from a lender who charges a discount rate of 10%. Find...
a) the discount
b ) the proceeds

Solution:

S = RM8000
d = 10%
t = 0.25 year

a) From D = Sdt, we get
discount = 8000 x 0.1 x 0.25
= RM 200

b) From P = S- D
proceeds = 8000 - 200
= RM7800

At first i thought this topic is easy... But after TEST 2 that day.. Arghhh! It's So DifFicult.. Miss Ch'ng! I could not answer your question... He He.. i will try harder for final exam... gambatte kudasai!

EFFECTIVE RATE

Effective Rate

The effective rate is the actual rate that you earn on an investment or pay on a loan after the effects of compounding frequency are considered. To make a fair comparison between two interest rates when different compounding periods are used, you should first convert both nominal (or stated) rates to their equivalent effective rates so the effects of compounding can be clearly seen.

The effective rate of an investment will always be higher than the nominal or stated interest rate when interest is compounded more than once per year. As the number of compounding periods increases, the difference between the nominal and effective rates will also increase.

To convert a nominal rate to an equivalent effective rate:

Effective Rate = (1 + (i / n))n - 1

Where:
i = Nominal or stated interest rate
n = Number of compounding periods per year

Example: What effective rate will a stated annual rate of 6% yield when compounded semiannually?

Effective Rate = ( 1 + .06 / 2 )² - 1 = .0609

MARK UP

The initial markup is the difference between the initial retail selling price (at the time of receipt of the merchandise) and the cost. Then the percentage is calculated as that difference divided by the initial cost of goods sold.

Let's look at an example:

Initial Retail is $1.99

Cost is $1.40

Difference = $0.59

Thus the Initial Markup is ($0.59/$1.40) x 100% = 42.14%

As a Fixed Amount

• Assume:
  • Retail list price = $2500
  • Product cost is $2000

• MARKUP = price - cost
  • $2500 - $2000 = $500

I love mark up... But i don't really like mark down.. I have to keep doing the same questions for many time to get the concept.. Final exam is coming around. so i have to study hard.. Miss Ch'ng give me good marks ok! hehe.. Kiddin'...


To find Mark Up... Just Use this formula...

R =M + C

R for retail and C for cost.. definitely you will get the make up...

CALCULATING THE NET PRICE FOR A CHAIN DISCOUNT

There is another topic.
CALCULATING THE NET PRICE FOR A CHAIN DISCOUNT

NP = L ( 1 – r1 ) ( 1 – r2 ) ( 1 – r3)

Chain discounts are discounts that are offered more than one. The concept is the same. The different is just to key in more than one discount.

Example:
Given the chain discounts are 30%, 10% and 5%.

NP = 2500 ( 1 – 0.03 ) ( 1 – 0.01 ) ( 1- 0.05 )
= RM 1496.25

SINGLE DISCOUNT EQUIVALENT

r = 1 – ( 1 – r1) (1 – r2) (1 – r3)