2.3 Percents & Investments

1. 2.3 Percents & Investments

2. Strategy • Read problem until you understand what you read • If appropriate, draw picture/diagram/table • Assign variable to unknowns • Write an equation • Solve it • Use solution to answer the question • Check your work

3. Basic Percent Ex1 • A number increased by 15% is 325.60. What is the number? • Should look like a tipping situation at a restaurant. (automatic gratuity) • Let X=the number • X+.15X=325.60 • 1.15X=325.6 • X=283.13

4. Tax Deductions Ex2 • Jim was paid $452 a week for work after the 21% deductions for uncle sam. How much did he make before deductions? • Let x=pretax earnings • X-.21x=452 • .79x=452 • X=572.15

5. Let’s go Shopping! • Discounts: amount by which price is reduced • Wholesale: amount store buys product for • Retail: amount you pay • Markup: a percentage of wholesale used for profit

6. Markup Ex 3 • All the clothes at American Eagle are marked up 40%, if the retail price is $32.13, what was the wholesale price? • Let w=wholesale • Wholesale+markup=retail • w + .4w = 32.13 • 1.4w=32.13 • w=22.95

7. Discount Ex 4 • Now there is a sale at American Eagle. Everything is 15% off. If the sale price is $40, what is the retail price? • Let r = retail price • Retail - Discount = Sale Price • r - .15r = 40 • .85r = 40 • r = 47.06

8. Investment Ex 5 • A total of $10,000 was invested into two mutual funds. A junk bond and a govt. bond. A junk bond is risky but yields 11% interest while a govt. bond is safer but only yields 5%. The total income gained after 1 year is $740 from the 2 investments. How much was invested in each? Rate Principle Interest .11x+.05(10000-x) = 740 .11x+500-.05x = 740 .06x+500 = 740 .06x = 240 X = 4000 Junk:$4000,Govt.:$6000 x .11 .11x Junk Govt .05(10000-x) .05 10000-x 10000 740 Total

9. Homework Pg.88:37-48