BUSINESS MATHEMATICS

BBA FIRST YEAR

DR. RAJESH CHABA

 SYLLABUS - BBA FIRST YEAR

Unit-I Ratio – Gaining & Sacrificing Ratio, Proportion, Percentage, Commission,

Discount & Brokerage.
Unit-2 Simultaneous Equations- Meaning, Characteristics Types and Calculations and
Preparation of Invoice
Unit -3 Elementary Matrices- Definition and Calculations, Types of Matrices.
Unit-4 Logarithms and Antilogarithms – Principles and Calculations, Simple and
Compound Interest.
Unit-5 Averages- Simple, Weighted and Statistical Averages, Arithmetic Mean,
Harmonic Mean, Geometric Mean, Profit and Loss.
BUSINESS MATHEMATICS
UNIT 1 – RATIO
LECTURE 2

DR. RAJESH CHABA

 TOPICS

RATIO
1 Meaning of Ratio
2 Definition of Ratio
3 Types of Ratio
4 Problems in Ratio
5 Ratio in Profit
PROPORTION
1 Meaning and Definition
2 Types of Proportion and Problems related to Proportion
 RATIO
 Definition:
 Ratio is the relation in which one quantity bears to another quantity of the
same kind with regard to their magnitudes ; the comparison is made by
considering what multiple or part or parts, the first quantity is of the second.
 For example, suppose there are 4 girls and 36 boys in a class, then the
ratio of boys to girls is 36/4=9
 Or, the number of boys is 9 times of the number of girls
 The ratio of girls to boys is 4/36=1/9
 Or, the number of girls is 1/9 of the number of boys
 A quantity which represents a relation or comparison of two numbers by
division is known as their ratios. For example
 Ratio of 80 and 8 is 80/8
 In other words, the ratio of a number with another number is that third number
which multiplied by second number gives first number.
 For example the ratio of 36 to 4 is 36/4, i.e 9 or 9x4 =36
 Here 36 is the first number, 4 is the second number and 9 is the third number
 Ratio (continued…)

 In certain situations, the comparison of two quantities by the

method of division is very efficient. We can say that the
comparison or simplified form of two quantities of the same
kind is referred to as ratio. This relation gives us how many
times one quantity is equal to the other quantity. In simple
words, the ratio is the number which can be used to express
one quantity as a fraction of the other ones.
 The two numbers in a ratio can only be compared when they
have the same unit. We make use of ratios to compare two
things. The sign used to denote a ratio is ‘:’.
 A ratio can be written as a fraction, say 2/5. We happen to see
various comparisons or say ratios in our daily life.
 Key Points to Remember: 

 The ratio should exist between the quantities of the

same kind
 While comparing two things, the units should be
similar
 There should be significant order of terms
 The comparison of two ratios can be performed, if
the ratios are equivalent like the fractions
 Ratio a/b is written as a:b (read as a to b). Here ‘a’
is called as ‘antecedent’ and ‘b’ the ‘consequent’
and each is called a ‘term’ of the ratio. ‘a’ is known
as First Term and ‘b’ is known as second term of
the ratio a/b
 If three or more quantities are to be compared by
division, then it is written as:
 a1 : a2 : a3 :a4
 Properties or Rules of Ratios
 In the ratio a/b, written as a:b, the order of terms is
significant since 1:9 and 9:1 are not same
 Ratio represents the relation between two quantities of the
same kind. For writing ratio between 1 paise and 1 rupee, we
have to convert rupee to paise or paise to rupee
 We cannot find a ratio between two Rs 3 and 5 litres since
these quantities are not of the same kind
 Ratio is an abstract number i.e there is no unit of the ratio
 Ratio of Rs 80 and Rs 8 is written as 80:8 and not Rs 80 : Rs 8
 A ratio remains unaltered if the numerator and denominator
are multiplied or divided by the same number.
 a/b = axc/bxc=a/d : b/d
 Characteristics of Ratio

 Ratio is a cross relation found between two or more quantities of

same type.
 It must be expressed in the same units.
 By the fraction laws a ratio can be expressed as: 10/5 = 10:5 or 2:1
 A ratio expresses the number of times that one quantity contains
another.
 Two or more ratios may be compared by reducing their equivalent
fractions to a common denominator.
 Different types of Ratio

1) Unit Ratio – When homogeneous items are same on the basis

of unit, it is called unit ratio. For example – Ram and Shyam are
getting Rs. 5 each. This can be expressed as 5:5 or 1:1.

2) Duplicate Ratio – When the homogenous items are shown in

the unit with square , it is called duplicate ratio.
For Example: 2:3 square means 22: 33 or 4:9

3) Triplicate Ratio – When the homogenous item is multiplied

by 3, it is known as triplicate ratio.
For Example: 23:33 = 2x2x2:3x3x3 = 8:27
Continue..

4) Sub triplicate ratio – When ratio is expressed in cube root it is

known as sub triplicate ratio. For example, ∛8: ∛27 = 2: 3

5) Ratio of greater in equality – In this type of ratio the first item of

given ratio is greater than other items. For Example- 8:3 > 13:8

6) Ratio of less in equality – When first item of given ratio is less than
the other items of ratio, it is called ratio of less of equality. For Example,
2:7 < 5:12 < 1:3

7) Equality ratio – In this type of ratio first item is equal to other item of
ratio. For Example: 5:5 = 8:8 = 12:12
 Ratio Formula

 Assume that, we have two quantities (or two numbers or two

entities) and we have to find the ratio of these two, then the
formula for ratio is defined as;
 a: b ⇒ a/b
 where a and b could be any two quantities.
 Here, “a” is called the first term or antecedent, and “b” is called the
second term or consequent.
 Example: In ratio 4:9, is represented by 4/9, where 4 is antecedent
and 9 is consequent.
 If we multiply and divide each term of ratio by the same
number (non-zero), it doesn’t affect the ratio.
 Example: 4:9 = 8:18 = 12:27
 Important Properties of Ratio
 The following are the important properties of proportion:
 Addendo – If a : b = c : d, then a + c : b + d
 Subtrahendo – If a : b = c : d, then a – c : b – d
 Componendo – If a : b = c : d, then a + b : b = c+d : d
 Dividendo – If a : b = c : d, then a – b : b = c – d : d
 Alternendo – If a : b = c : d, then a : c = b: d
 Invertendo – If a : b = c : d, then b : a = d : c
 Componendo and dividendo – If a : b = c : d, then a + b : a – b
=c+d:c–d
 Ratios related to Partnership
Profit Sharing Ratio:- The ratio in which partners of a firm divided profit
or loss of the firm is called profit sharing ratio. For example, if in a firm
partners A,B and C divide profit as 40%, 30% and 30%, then profit
sharing ratio will be 40 : 30 : 30 i.e. 4 : 3 : 3.
Sacrificing Ratio (Economic Definition) :- Sacrifice Ratio is the ratio
that measures the costs associated with a slowing economy, in terms of
output to change inflationary trends. Sacrifice Ratio is calculated by
dividing the cost of lost production by the percentage change in inflation.
The quotient gives the loss of output per change in measured inflation.
Sacrificing Ratio (Mathematical Definition) :- A new partner who is
admitted into the firm often brings ‘Capital’ and ‘Goodwill’ in cash (or
premium). Bringing ‘Capital’ entities him to share in the profit of the firm.
Profit-loss ratio of the new partner is adjusted and a ‘sacrifice’ is made by
the existing partners. Hence Sacrificing ratio = Old ratio – New ratio.
 Continue..
 Gaining Ratio:- Gaining ratio is a partnership term. It is a ratio that is
calculated in the event of retirement or death of a partner. It is calculated as
follows: Gaining Ratio = New Ratio - Old Ratio
 For Example:-
 Comparison of Ratios

 If (a : b) > (c : d) = (a / b > c / d)
 The compounded ratio of the ratios: (a : b), (c : d), (e : f) is (ace :
bdf).
 Duplicate Ratios : If a:b is a ratio, then:
 a2 : b2 is a duplicate ratio
 √a : √b is the sub-duplicate ratio
 a3 : b3 is a triplicate ratio
 RATIO PROBLEMS
 1 Kg Apples = Rs 80 ; 1Kg Oranges = Rs 50, what is the ratio of cost of apples to
the cost of oranges.
 What is the ratio of 8 cm to 3 metres
 The sum of two numbers is 40 and difference is 4. What is the ratio between the
two numbers
 A’s age is half that of B’s age. When A’s age doubles, what will be the ratio of B’s
age to that of A’s age
 The ratio between the number of boys and girls is 2:3. If number of boys is 18,
find the total number of students in the class
 A ratio in its lowest terms is 3:7. If the difference between the quantities is 16, find
the quantities.
 The ages of Ram and Mohan are in the ratio 5:7 and the difference between them
is 12 years. Find the age of Ram and Mohan.
 Two numbers are in the ratio of 5:8. If 9 is added to each they are in the ratio of
8:11. Find the numbers.
THANK YOU
BUSINESS MATHEMATICS
UNIT 1 – RATIO (CONTD..)

LECTURE 2

DR. RAJESH CHABA

 RATIO PROBLEMS
 Which is the greatest ratio?
14/6, 50/14, 70/18,38/4 0r 7/3,25/7, 35/9, 19/2
 What should be subtracted from each term in the ratio 5:6 so that it becomes 8:11
 The salary of two employees is in the ratio of 7:8 and the total salary of both of them
is Rs 3450. What reduction of equal amount should be made in their salaries so that
the ratio becomes 5:6
 The ages of A and B are in the ratio of 9:4. Seven years hence, the ratio of their ages
will be 5:3. Find their ages
 The present age of two brothers are in the ratio of 3:4. Five years back their ages were
in the ratio of 5:7. Find their present ages
 The income of A and B is in the ratio of 4:3 and their expenditure is in the ratio of
3:2. If they both save Rs 600 at the end of the year, find the annual income of each.
 Two brothers have their monthly income in the ratio of 8:5 and their spending in the
ratio of 5:3. If they save Rs 2400 and Rs 2000 p.m, find their monthly incomes
 The daily salary of two persons are in the ratio of 3:5. If each receives an increase of
Rs 20 in the daily salary, the ratio is altered to 13:21. Find their salaries.
BUSINESS MATHEMATICS
UNIT 1 – RATIO (CONTD..)

LECTURE 3

DR. RAJESH CHABA

 RATIO PROBLEMS

 Divide Rs 7,065 between Arvind and Anand in the ratio of 4 : 5

 Divide Rs 5,880 in the ratio of 3 : 6 : 5 among A, B and C
 The ratio of students in Arts, Science and Commerce faculties is 5 : 4 : 3. If the number
of students in Science faculty is 236, find the number of students in Arts and
Commerce faculties.
 In a college of 405 students the ratio between the number of boys and girls is 7 : 2. If
the number of girls is raised by 50 and the ratio of boys and girls comes to be 3 : 1,
then find the increase in number of boys
 A, B and C work together and earn Rs 312 as daily wages. The same work is done by
A, B and C in 2, 3 and 4 days respectively. Find daily wages of each, if the wage is
given proportional to their work done.
 It was intended that Rs 1,980 should be divided among three boys A, B and C in the
ratio of 2 : 3 : 4, but by mistake the distribution was made in the ratio of ½ : 1/3 : 1/6.
How much does each gain or lose by the error
BUSINESS MATHEMATICS
UNIT 1 –RATIO (CONTD..)

LECTURE 4

DR. RAJESH CHABA

 Continued Ratio
 Short Cut Method (3 unknowns)

2 : 7

3 : 9

Or 2x3 : 3x7 : 7x9

Or 6 : 21: 63
 Continued Ratio Example
 If a:b = 3:5 and b:c = 5:7 then find out a:b:c

a b3 5

b c5 7
3x5 : 5x5 : 5x7 OR axb:bxb:bxc
15 : 25 : 35 or
3:5:7
 Continued Ratio Examples (contd…)

 If x:y=3:4 and y:z=8:9 then find x:z

 X Y 3 4

 Y Z 8 9
 First find x:y:z
 3x8:8x4:4x9
 X:y:z is 24:32:36 OR
 6:8:9
 Hence x:z = 6:9 or 2:3
Continued Ratio Examples (contd…)
 If a:b=2:3, b:c = 4:5, and c:d=6:7 then find a:b:c:d

 a b 2 3

 b c 4 5

 c d 6 7
 a:b:c:d = abc:bbc:bcc:bcd
 2x4x6:3x4x6:3x5x6:3x5x7
 Hence a:b:c:d is 48:72:90:105 or
 16:24:30:35
 CONTINUED RATIO
PROBLEMS
 If four quantities a, b, c, d, be such that a:b=3:4, b:c=5:6, c:d=4:9, then find continued
ratio of a, b, c, d.
 The sum of three numbers is 98. The ratio of the first to second is 2/3 and the ratio of
second to third is 5/8. Find the second number
 Divide Rs 2494 within Jalaj, Pankaj and Neeraj so that Jalaj gets twice of Pankaj and
Pankaj gets 4 ½ of Neeraj?
 Divide Rs 630 among Govind, Shambhu, Ravi and Ganesh so that:
 Govind : Shambhu = 2:3
 Shambhu : Ravi = 4:5
 Ravi : Ganesh = 6:7
 Ramesh, Mohan and Suresh play cricket. The runs scored by Ramesh and Mohan are in
the ratio of 3:2. Runs of Mohan and Suresh are also in the ratio of 3:2. Together they score
418 runs. How many runs did they score individually.
 In a film shooting A and B received rupees in any ratio. B and C received rupees in the
same ratio as of A and B. If A gets Rs 1,60,000 and C gets Rs 2,50,000, find the amount
received by B.
BUSINESS MATHEMATICS
UNIT 1 –RATIO (CONTD..)

LECTURE 5

DR. RAJESH CHABA

 PROBLEMS
 A box contains one rupee, fifty paise and twenty five paise coins in the ratio of
5:6:7. If their total value is Rs 117, find how many coins are there of each type.
 The value of the coins in a cash box is Rs 80. If the proportion in rupee coins,
fifty paise coins, twenty five paise coins and ten paise coins is 3:5:6:10, find
out the number of all four kinds of coins.
 The income of a trader increases in the ratio of 4:5 in the first year and 5:7 in
the second year but reduces in the third year in the ratio of 14:13.
 Find out the ratio of his income in the beginning and at the end.
 If his income in the beginning is Rs 800, what is his income now
 In an election, an electorate in every 16 failed to vote. Of the two candidates
one secured votes representing 19/40 of the total electorate and was elected
with a majority of 5 votes. How many votes did the other candidate score
 Divide Rs 500 among A, B, C, D so that A and B get thrice as much as C and D
together. B may get four times of what C gets and C may get 1 ½ times as
much as D
BUSINESS MATHEMATICS
UNIT 1 –RATIO (CONTD..)

LECTURE 6

DR. RAJESH CHABA

 PROBLEMS
 In a journey of 48 kms performed by Car, Rail and Bus in order, the distances by three
modes in that order are in the ratio of 8:1:3 and charges per km in that order are in the
ratio of 8:1:4. The car charges being Rs 1.20 per km, find the total charges for the journey.
 Between two stations, the first, second and third class fares were determined, at first, in
the ratio of 8:6:3. Later on the first class fare was increased by 1/16 and the second class
and that of the third class were reduced by 1/12 and 1/6 respectively. In a year, the number
of first, second and third class passengers was in the ratio of 3:4:9 and money collected at
the booking office was Rs 2,24,000. How much was paid by each class passengers.
 A factory employs skilled workers, unskilled workers and clerks in the ratio of 8 : 5 : 1,
and wages are in the ratio of 5 : 2 : 3. When 40 unskilled workers are employed, the total
daily wages of all the employees amount to Rs 636. Find the daily wages paid to each
category of the employees.
 The income of business in six years is in the ratio of 2:3:4:5:6:7. If the average income of
these six years is Rs 3375, calculate the income of each year.
 If out of three numbers the ratio of first two is 2:3 and the ratio of last two is 6:5, then find
out the difference between the sum and average of the three numbers when the difference
of first and last is 8.
BUSINESS MATHEMATICS
UNIT 1 –RATIO (CONTD..)
LECTURE 7

DR. RAJESH CHABA

 PROBLEMS
 In a mixture of 35 litres the ratio of milk and water is 4 : 1. If 7 litres of water is added to the
mixture, then what will be the new ratio?
 A container has 84 liter of mixture consisting of milk and water in the ratio of 5 : 2. How much
more water should be added so that the ratio becomes 2 : 1?
 Two types of oil A and B have been mixed in the ratio of 3 : 2 and total mixture is 90 litres. When
one-third of the mixture was consumed some more quantity of oil A was mixed with the mixture
and the ratio was made as 2 : 1. Find out how much quantity of A was mixed later on.
 Gold and silver are melted in the ratio of 9 : 4 and 7 : 4 to form two alloys. These two alloys are
melted in equal quantity to form a third alloy. Find the ratio of gold and silver in the new alloy
 The mixture of A and B liquid in one pot has a ratio of 4:5. The same mixture in another pot has a
ratio of 5:1. In what ratio should the mixture be extracted from each pot and poured into the third
pot so that the ratio of A and B liquid comes to 5:4 in the third pot.
 In one pot, the ratio of milk and water is 3 : 5 and in another pot it is 6 : 1. In what ratio should the
contents of the two pots be mixed so as to make the ratio between milk and water as 7 : 3
 A mixture of a certain quantity of milk with 16 liters of water is worth Rs 27.00 per litre. If pure
milk is worth 32.40 per litre, how much milk is there in the mixture? (Assume price of water id Rs
0.00 per litre)
 BUSINESS MATHEMATICS
UNIT 1 – PATNERSHIP, GAINING &
SACRIFICING RATIO

LECTURE 8

DR. RAJESH CHABA

PARTNERSHIP, GAINING &
SACRIFICING RATIO
 PARTNERSHIP
 When two or more persons agree to run a business jointly, they are called ‘Partners’ and this deal
is called ‘Partnership’
 Indian Partnership Act, 1932, Section 4, “Partnership is a relation among persons who have
agreed to share the profits in a trade which is operated by all of them or any one”
 At least two members are required for partnership. The total number of members in baking
business is at the most 10 and in others is at most 20.
 Two types:-
 Simple partnership – All partners invest their money(equal or unequal) for the same time
 Compound partnerhsip – When partners invest their money for different times
 Partner who invests the money in the business as well as take part in its management is known as
‘Working Partner’
 The partner who invests the money only and does not work in the business is known as
‘Sleeping partner’
 The profit or loss between the partners is divided in the ratio of their invested capitals or
 Ratio of Profit or Loss = Ratio of capitals
 With this formula, if capital ratio is known then profit or loss ratio can be obtained. If profit
or loss ratio is known, then capital ratio may be obtained
 PROBLEMS
 Ram and Shyam are two partners in a firm sharing the profit in a ratio 4:5. If the firm earns a
profit of Rs 14,130 in 2007, calculate the amount of profit to be received by each partner.
 X, Y and Z have capitals of Rs 20,000, Rs 10,000 and Rs 4,000 respectively. The profits of one
year is Rs 1700. Profits and Losses are shared in their capital ratios. Obtain the profits of each.
 In a business, A and B gained some amount in a certain ratio. Band C received the profit in the
ratio as that of A and B. If A received Rs 6,400 and C received Rs 10,000, what is the amount
received by B?
 A, B and C are partners who share their profit in the ratio of their capital. A’s capital is Rs
5000, and B’s capital is Rs 25000. In 2008 profit was Rs 3500 in which C’s share was Rs
1,500. Find C’s capital?
 Gaurav, Garima and Vaibhav are partners in a business in which Gaurav invested Rs 5000 for
6 months, Garima Rs 6000 for 4 months and Vaibhav Rs 8000 for 5 months. If they together
gained Rs 1880, find the share of each partner.
 A and B enter into a partnership. A contributes Rs 10,000 and B contributes Rs 8,000 in the
beginning. A invested Rs 2,000 more after 3 months. B withdraws ¼ of the amount after 1
month when C enters in business on same day with Rs 14,000. They earn a profit of Rs 7,320
in the year which they decide to divide in the ratio of their capitals. Find out the profit of A, B
and C.
 BUSINESS MATHEMATICS
UNIT 1 – PATNERSHIP, GAINING &
SACRIFICING RATIO

LECTURE 9

DR. RAJESH CHABA

 SACRIFICING RATIO
 No person can be admitted as partner without the consent of all the partners.
 Person who is admitted as a partner into a firm does not thereby become liable to
any act of the firm done before he became a partner.
 A new partner who is admitted into a firm often brings ‘Capital’ and ‘Goodwill’
in cash (or Premium). Bringing ‘Capital’ entitles him to share in the profit of the
firm
 Profit-Loss ratio of the new partner is adjusted according to an agreement among
the partners. This is done as follows:-
 Share of new partner is taken from any of the old partners.
 The old partners sacrifice ratio equals amounts of their share for the share of the new
partner.
 The old partner sacrifices the amount in their profit sharing ratio for the share of the new
partner.
 The old partner sacrifice their share in the ratio as per agreement.
 The share of old partners given to the new partner is known as ‘Sacrificing Ratio’.
 Sacrificing Ratio = Old Ratio – New Ratio
 PROBLEMS - SACRIFICING
RATIO
 A and B are partners who share profit and loss in the ratio of 3:2.
They agree to take C into partnership on 1/4th share of profit.
Ascertain the new profit sharing ratio?
 C and D share profits and losses in a firm in the ratio 3:2. E entered
in the firm as a new partner; his profit sharing ratio is ¼. Find out
the new profit sharing ratio in the following cases:-
 When E has taken whole of his share of profit from D.
 When E has taken his share of profit from C and D in equal ratio.
 When E has taken his share of profit from C and D in the ratio of 4:5
 When E has taken his share of profit from C and D in their profit sharing
ratio.
 A and B are partners sharing profits and losses in the ratio of 3:2.
C is admitted as a partner. The new profit sharing ratio of A, B and
C is 4:3:2. Find the Sacrificing Ratio of A and B
 BUSINESS MATHEMATICS
UNIT 1 – PATNERSHIP, GAINING &
SACRIFICING RATIO

LECTURE 10

DR. RAJESH CHABA

 GAINING RATIO
 Partner can leave firm for following reasons:-
 Due illness or physical weakness
 Due old age
 Due to differences with other partner(s)
 Due to desire to have more profitable work
 Any other reason for not staying
 When a partner retires or dies, his share of profit is divided among other partners
according to an agreement. The difference in Old ratio and New Ratio of profits is known
as Gain ratio
Circumstances Between Remaining Partners

New Profit-Loss Ratio Gaining ratio

When new profit-loss ratio is given Given New Profit-loss ratio – old
profit-loss ratio
When new profit-loss is not given Old Profit-loss ratio is taken Old Profit-loss ratio of the
as new remaining partners
When Gaining Ratio is taken from the Old Profit-loss ratio + Gaining ratio is given
share of the retiring partner Gaining Ratio
 DISTINCTION – SACRIFICING RATIO & GAINING
RATIO
Basis of Sacrificing ratio Gaining ratio
Distinction
1. Meaning Old partners sacrifice their profits On retirement or death of a partner,
in favour of new partner. This ratio there is an increase in the profit share
of sacrifice is called ‘Sacrificing of the remaining partners. The
ratio’ increase in profit is said to be the ‘
Gaining Ratio’
2. Computation Sacrificing ratio = Old profit-loss Gaining Ratio = New profit-loss ratio
ratio – New profit-loss ratio – Old profit-loss ratio
3. Time of At the time of admission of a new At the time of admission of leaving of
Computation partner a partner
4. Objective The objective of this ratio is to The objective of this ratio is to pay
distribute the cash amount of the amount of the goodwill of the leaving
goodwill into old partners partners to him
according to their Sacrificing Ratio
5. Adjustment The capital accounts of old partners The capital accounts of new partners
of goodwill are credited for adjustment of is debited for adjustment of goodwill
goodwill
 PROBLEMS –GAININGRATIO
 A, B and C are partners in a firm sharing profits and losses in the ratio of
5:3:2 respectively. Find out the new profit sharing ratio and gaining ratio
when A retires?
 A, B and C are partners sharing ratio in the ratio of 2:2:1. B retires and his
entire share is taken by C. Calculate new profit sharing ratio and gaining
ratio?
 A, B and C share profits in the ratio of ¼, 1/6 and 7/12 respectively. If C
retires then what are the new profit ratios of A and B while they retain their
old ratios?
 A, B and C are partners sharing profits and losses in the ratio of 5:3:2. B
retires. His share is taken over by A and C in the ratio of 2:1. Calculate the
new profit sharing ratio and gaining ratio?
 X, Y and Z are partners sharing profits and losses in the ratio of 3:2:1. Y
retires. X takes 5/24 from Y and Z takes 1/8 from Y. Find new profit sharing
ratio and gaining ratio of X and Z?
BUSINESS MATHEMATICS
UNIT 1 –PROPORTION
LECTURE 11

DR. RAJESH CHABA

 PROPORTION
 Definition: A statement (or an equation) which represents that the two ratios are
equal is called proportion
 Let the two ratios a/b and c/d be equal. The equation a/b=c/d is a Proportion
 a/b=c/d means that the ratio from ‘c’ to ‘d’ is same as the ratio from ‘a’ to ‘b’
 The equality of two ratios is also written as ‘::’. For example,
 a/b::c/d or a:b::c:d
 Extremes and Means. The four terms a,b,c,d in the proposition a:b::c:d are
called ‘proportional’ which are also known as ‘first term’, ‘second term’, ‘third
term’ and ‘fourth term’. The term ‘a’ and ‘d’ are called ‘extremes’ and the tern ‘b’
and ‘c’ are called the ‘means’
 Fourth Proportional. In the proportion a:b::c:d, the fourth term d is said to be
the fourth proportional of the first three terms
 Product. According to the definition a/b=c/d or ad=bc i.e the product of
the extreme is equal to the product of the means. Hence, if any three terms in a
proportion are known, the fourth may be determined by the relation ad=bc. This
is why, this rule is called the ‘Rule of three’
 Ratios And Proportion

 Ratio and Proportion - Ratio shows relationship between two numbers and
proportion shows relationship between two ratios. When four numbers are related
to each other in such a way that ratio of first and second will be equal to the ratio of
third and fourth number, it is called Proportion
 Definition: A statement (or an equation) which represents that the two ratios are
equal is called Proportion
 Ratio and proportions are said to be faces of the same coin. When two ratios are
equal in value, then they are said to be in proportion. In simple words, it compares
two ratios. 
 Example : Let 8, 16, 24 and 48 be four numbers. The ratio of the first tow numbers
i.e 8 and 16 is 8 : 16 i.e 1 : 2 and the ratio of third and fourth number is 24 : 48 i.e
again 1 : 2. Thus the two ratios of these four numbers shows an equal relationship
and this equal relationship is called Proportion. Therefore these four numbers are
called ‘Proportional’
 The equality of two ratios is written as ‘ = ‘ or ‘::’. ‘::’ is called as ‘Proportion’ sign.
Hence the numbers in the examples is written as 8 : 16 :: 24 : 48
DIFFERENCES : RATIO & PROPORTION

S Ratio Proportion
No
1. There are two terms in a There are four terms in a proportion.
ratio.

2. Comparison of two Comparison of two ratios.

quantities of same type.

3. Two quantities must be of All four quantities are not of same type but
same type. the first two are of one type and the last two
may be of another type.

4. There is no product rule. The product of extremes is equal to product

of the means.
 Kinds of Proportion

 Simple Proportion
 Direct Proportion

 Inverse Proportion or Indirect Proportion

 Continued Proportion

 Compound Proportion
 Simple Proportion
 Simple Proportion – The combination of two ratios is called ‘Simple
Proportion’. In this two terms of one ratio is given and one term of the
other ratio is given. With the help of these three, fourth proportional is
found out by using the “Law of Three’
 Example : If the price of 15 books is Rs 225, find the price of 42 books?

 Solution

Terms of same kind – 15 books and 42 books

 Terms of second ratio – Rs 225 and Rs ‘X’
 Price of 42 books (X) will be more than price of 15 books, therefore in
first ratio, small term will be written first and then bigger term
 Therefore, 15 : 45 :: 225 : X
 15 x X = 45 x 225
 X = 45 x 225 / 15 = Rs 675
DIRECT PROPORTION
 Direct Proportion. If in a proportion the two quantities of different
kinds are so related that an increase (or decrease) in the value of one
is accompanied by an increase (or decrease) in the same ratio, then
these two quantities are called in ‘direct ratio’ or directly proportional
to each other and this proportion is known as ‘direct proportion’
 For example, if there is an increase (or decrease) in the quantity of an
article, then there will be an increase (or decrease) in the same ratio as
their prices.
 The arrangements of the terms in proportion for direct proportion is
as follows:-
 The quantity of an article Price of the article
or Quantity a1 and a2 Price b1 and b2
a1 : a2 :: b1: b2
PROBLEMS – DIRECT PROPORTION
 If 4 kgs Ghee can be bought for Rs 1120, what quantity can be bought for Rs 2880?
 If 5 persons make 15 kilometers road in certain time, how many kilometers road can
be made by 20 persons in the same time?
 A car covers a distance of 60 kms in 3 hours. How much distance will it cover in 5
hours?
 Rs 4,500 Income tax is paid on an income of Rs 22,000. Find the annual income on
which the tax paid is Rs 7,650?
 The price of a diamond varies directly with the square of its weight. If the price of a
diamond weighing 3 ½ carat is Rs 40000, find the price of another diamond
weighing 5 ¼ carat?
 The Income tax on the income above Rs 3500 is 9 paise per rupee. If a person pays
Rs 10800 as Income tax, what is his gross income?
 A precious stone worth Rs 78000 is accidentally dropped and broken into three
pieces, the weights of which are in the ratio of 5:7:8. The value of the stone is
proportionate to the square of the weight. Calculate the loss incurred due to the
breakage?
 BUSINESS MATHEMATICS
UNIT 1 –PROPORTION (CONTD..)

LECTURE 12

DR. RAJESH CHABA

INVERSE PROPORTION
 Inverse Proportion. If in a proportion the two quantities of
different kinds are so related that an increase (or decrease) in the
value of one is accompanied by an decrease (or increase) in the
same ratio, then these two quantities are called in ‘inverse ratio’ or
inversely proportional to each other and this proportion is known as
‘inverse proportion’
 For example, if the number of workers is increased (or decreased),
then the number of days for completing a work will decrease (or
increase) in the same ratio.
 The arrangements of the terms in proportion for direct proportion is
as follows:-
 Number of workers Number of days for completing the work
or Quantity a1 and a2 Days b1 and b2
a1 : a2 :: b2 : b 1
PROBLEMS – INVERSE PROPORTION
 A car covers a distance in 4 hours at the rate of 60 kilometers an
hour. In what time this much distance can be covered with a speed of
80 kilometers per hour?
 16 men or 28 women can do a work in 40 days. In how many days
will 24 men and 14 women complete the same work?
 If 6 men and 10 boys complete a work in 4 days and 4 men and 10
boys can complete the work in 5 days, then calculate in how many
days the same work will be done by 2 men and 5 boys?
 A fort had food for 150 men for 45 days. After 10 days 25 men left
the fort. How long will the food last for the remaining men?
 A certain number of men can finish a work in 100 days. If, however,
there was 10 men less, it would take 10 days more for the work to be
finished. How many men were there originally?
 BUSINESS MATHEMATICS
UNIT 1 –PROPORTION (CONTD..)

LECTURE 13

DR. RAJESH CHABA

 CONTINUED PROPORTION
 Continued Proportion. Three quantities a, b, c of same kind are said
to be in continued ratio, if the ratio of first and second is same as the
ratio of second and third and their proportion is called ‘Continued
Proportion’, i.e, if a:b=b:c, then a,b,c are in continued ratio and the
proportion a:b::b:c is ‘Continued Proportion’. Here second term is
called ‘Mean Proportional’ of first and third, and third term is called
‘Third Proportional of the first two’.
 If there are three numbers 5, 20, 80 where the ratio of 5 and 20 is same as
the ratio of 20 and 80. Thus, the continued proportion is
 5/20=20/80 or 1/4=4/16 or 1:4::4:16
 According to the rule,
 The product of the means=the product of extremes
 4x4=1x16
 i.e (mean proportional)2 = (first term x third term)
 Continued Proportion
 Three quantities a, b and c of same kind are said to be in continued
ratio if the ratio of first and second is same as the ratio of second and
third and their proportion is called Continued Proportion.
 If a : b = b : c, then a, b, and c are in Continued Ratio and the

proportion a : b :: b : c is Continued Proportion

 Here second term is called ‘Mean Proportional’ of first and third,

and third term is called ‘Third Proportional’ of the first two

PROBLEMS – CONTINUED PROPORTION
 The last three terms of a proportion are 8,12,16 respectively. Find the
first term?
 If 3, x, 1083 are in continued ratio, find x?
 Find mean proportional of 4 and 16?
 The salary of A, B, C are in continued proportion. If the salary of B
and C are respectively Rs 250 and Rs 1250, find the salary of A?
 Two clerks A and B whose salaries were Rs 7500 and 14500 received
an increase in their salaries. If their salaries were increased in the
same ratio, what increase B secures when A’s salary reaches 9000?
 An employer raises his workman’s hourly rate of wages in the ratio of
4:5 but reduces the hours of labour per week in the ratio of 9:8. What
will be increase or decrease in a full weekly wage bill which presently
is Rs 7200?
 COMPOUND PROPORTION
 Compound Proportion. A proportion that contains two ratios is called a ‘simple
proportion’. A proportion that contains more than two ratios is called a
‘Compound Proportion’.
 For example
 a a b1: b2
1 : 2 ::

c 1: c 2
d1 : d2
 Procedure to solve the questions on Compound Proportion
 Write the quantity for which unknown value is to be found out.

 Taking the pairs of quantities of same kind, write them in same ratio. Keeping
in mind direct proportional or inverse proportional put the arrows
 Multiply all the mean terms of the compound proportion.

 Multiply all the extreme terms of the compound proportion

 Equating the two products, find the value of unknown term (x).
 Compound Proportion

 Consider two ratios to be a: b and c: d.

 Then in order to find the continued proportion for the two given ratio
terms, we convert the means to a single term/number. This would, in
general, be the LCM of means.
 For the given ratio, the LCM of b & c will be bc.
 Thus, multiplying the first ratio by c and second ratio by b, we have
 First ratio - ca : bc
 Second ratio - bc : bd
 Thus, the continued proportion can be written in the form of ca: bc: bd
 If a : b = 3 : 4 and c : d = 5 : 6, then take LCM of b and c which will be
4x5 =20 then the two ratios become 3x5:4x5 and 5x4:6x4 i.e 15:20 and
20:24.
 The continued ratio will be 15:20:24
 BUSINESS MATHEMATICS
UNIT 1 –PROPORTION (CONTD..)

LECTURE 14

DR. RAJESH CHABA

PROBLEMS – COMPOUND PROPORTION
 15 men plough a land in 14 days working 12 hours daily. How many
days will be taken by 21 men to plough the same land working 10 hours
daily?
 4 men or 12 women can do a job in 5 days by working 8 hours per day.
In how many days 2 men and 4 women can do the same job by working
10 hours per day?
 A contractor undertook to do a job in 132 days, and employed 168 men
to carry out the job, but after 36 days he found out that only a quarter of
the work has been carried out. How many more men should be
employed to finish the work in time?
 In a factory 6 workers working 8 hours a day, manufacture 4 gates in 20
days. If 9 workers work 10 hours a day, in how many days will they
manufacture 6 gates?
 If 30 men working 8 hours a day can do a piece of work in 24 days, in
how many days 18 men working 10 hours a day will finish the work?
 Video Link

 Concept of Ratio & Proportion

http://youtube.com/watch?v=RZ640Q1o_eI
THANK YOU
BUSINESS MATHEMATICS
UNIT 1 – PERCENTAGE

LECTURE 15

DR. RAJESH CHABA

 Percentage

 In mathematics, a percentage is a number or ratio that can be

expressed as a fraction of 100, which means, a part per hundred.
The word per cent means per 100. It represented by the
symbol “%”. Percentages have no dimension. Hence it is called a
dimensionless number. If we say, 50% of a number, then it means
50 per cent of its whole.
 Percentages can also be represented in decimal or fraction form,
such as 0.6%, 0.25%, etc. In academics, the marks obtained in any
subject are calculated in terms of percentage. Like, Ram has got
78% of marks in his final exam. So, this percentage is calculated on
account of total marks obtained by Ram in all subjects to the total
marks.
 Percentage

 Percent or Percentage can be defined as:-

 A percentage is a fraction whose denominator is 100 and the numerator is a
definite quantity which is called the Rate Percent e.g. 90% in fraction form
is 80/100, here 80 is Rate Percent
 A number expressed as a fraction of one hundred is called a percentage
 A percentage is a ratio, the consequent of which is 100 and the antecedent
is the rate percent
 Merits of Percentage
 Percent of percentage is Mathematical scale of one kind which measures a
given value on the scale of 100
 Percent provides uniformity in the digits of different kinds hence
comparison becomes easy
 Used in calculation of Interest, Commission, Discount, Brokerage, Diivdent
etc
 Percentage Formula

To determine the percentage, we have to divide the value by the

total value and then multiply the resultant to 100.

Percentage formula = (Value/Total value)×100

Example: 2/5 × 100 = 0.4 × 100 = 40 per cent
 How to calculate the percentage of a number?

To calculate the percentage of a number, we need to use a

different formula such as:
P% of Number = X
where X is the required percentage.
If we remove the % sign, then we need to express the above
formulas as;
P/100 * Number = X
Example: Calculate 10% of 80.
Let 10% of 80 = X
10/100 * 80 = X
X=8
 Percentage Example

 Two quantities are generally expressed on the basis of their ratios. Here, let us
understand the concepts of percentage through a few examples in a much better way.
Examples: Let a bag contain 2 kg of apples and 3kg of grapes. Find the ratio of
quantities present, and percentage occupied by each.
Solution: The number of apples and grapes in a bag can be compared in terms of their
ratio, i.e. 2:3.
The actual interpretation of percentages can be understood by the following way:
The same quantity can be represented in terms of percentage occupied, which is given
as:
Total quantity present = 5 kg
Ratio of apples (in terms of total quantity) = 2/5
= 2/5×100
From the definition of percentage, it is the ratio that is expressed per hundred,
1/100=1%
Thus, Percentage of Apples = 2/5×100=40%
Percentage of Grapes = 3/5×100=60%
 Converting Fractions to Percentage

A fraction can be represented by a/b.

Multiplying and dividing the fraction by 100, we have
a/b×100/100
=(a/b×100)/100 ………………(i)
From the definition of percentage, we have =1/100 = 1%
Thus equation (i) can be written as:
=a/b×100 = x%
Thus fraction can be converted to percentage simply by
multiplying the given fraction by 100.
 Difference between Percentage and Percent

 The word percentage and percent are related closely to each

other.
Percent ( or symbol %) is accompanied by a specific number.
E.g., More than 75% of the participants responded with their
positive response to abjure.
The percentage is represented without a number.
E.g., The percentage of the population affected by malaria is
between 60% and 65%.
 Percentage in Maths

 Every percentage problem has three possible unknowns or variables :

Percentage
Part
Base

In order to solve any percentage problem, you must be able to identify

these variables.
Look at the following examples. All three variables are known:

Example: 70% of 30 is 21
70 is the percentage.
30 is the base.
21 is the part.
Continue..

Example: 25% of 200 is 50

25 is the percent.
200 is the base.
50 is the part.
Example: 6 is 50% of 12
6 is the part.
50 is the percent.
12 is the base.
 Percentage Tricks

To calculate the percentage, we can use the given below tricks.

 x % of y = y % of x

Example- Prove that 10% of 30 is equal to 30% of 10.

Solution- 10% of 30 = 30 x 10/100 = 3
30% of 10 = 10 x 30/100 = 3
Therefore they are equal i.e. x % of y = y % of x holds true.
 Problems on Percentage
 Example- Suman has a monthly salary of Rs1200. She spends Rs280
per month on food. What percent of her monthly salary does she save?
Solution- Suman’s monthly salary = Rs1200
Savings of Suman = Rs(1200 – 280) = Rs 920
Fraction of salary she saves = 920 / 1200
Percentage of salary she saves = 920 / 1200×100 = 920/12
= 76.667 %
Continue..
 Example- Below given are three grids of chocolate.
What percent of Dark chocolate is there in each
White chocolate bar?
Continue..
Solution- Each grid above has 100 white chocolate blocks. For
each white chocolate bar, the ratio of the number of dark
chocolate boxes to the total number of white chocolate bars can
be represented as a fraction.
(i) 0 dark and 100 white.
i.e. 0 per 100 or 0%.
(ii) 50 dark and 50 white.
i.e. 50 per 100 or 50%.
(iii) 100 dark and 0 white.
i.e., 100 per 100 or 100%.
PROBLEMS – PERCENTAGE
 Convert fraction 7/9 into percentage
 Express 18/25 and 16 ½ into percentage
 Convert 80% and 13 ½% into fractions
 Convert 3.456 into percentage
 Convert 125 % and 16 2/3 % into decimal
 Find 12 ½ of 50 kgs
 If 19 percent of a city is 399, find the total
population
 What percent Rs 21 of Rs 280
 What percent 29 cubic centimetre is of one litre
PROBLEMS – PERCENTAGE
 On a certain day 15% of the boys were absent and 34 were present
in certain class. Find the number of boys enrolled in that class?
 If 32 is added to 80% of a number, the result is the number itself,
find the number
 If the income of A is 50% more than the income to B, then by what
percent is the income of B less than the income of A
 In measuring the side of a square, an error of 5% (in excess) is
made. What is the error percentage in calculated area
 The population of a city increases 10% annually. If the population
at the beginning is 7,98,000, find the population at the end of third
year
 A person drawing a salary of Rs 60,000 a month got a rise of 25%
of salary. One year later his salary reduced by 10% and in next year
it again increased by 20%. Find his present salary
PROBLEMS – PERCENTAGE
 The depreciation rate of a machine is 10% per annum. If after four
years the value of machine is Rs 1,31,220, find the cost of the machine
 My house is assessed for 9,80,000. I have to pay 13% as house tax and
12% as water tax. How much tax I pay?
 A person pays 10% income tax on his income and of the rest gives 25%
to his son and 15% to his daughter. If he has Rs 5,400 still with him
paid his net income
 The population of a city was Rs 20,000. If the number of males
increases by 10% and the number of females decreases by 6%, then the
total population remains unchanged. Find the number of males and
females?
 The price of 4 units of A commodity and 5 units of B commodity
together is Rs 170. If the price of A commodity increases by 5% and
that of B commodity decreases by 10%, the price of the two becomes
Rs 165. Find out the price per unit of both the commodities
PROBLEMS – PERCENTAGE
 A earns Rs 50 more than B. B earns one and one third of what C earns. C
earns 10% more than D, and E earns Rs 20 more than D. If the total earnings
of all these five persons are Rs 5,500. Find the earning of each?
 The production cost of a product is as follows:-
 Cost of raw material – 48%
 Cost of labour – 22%
 Other expenses – 30%
 If the labour cost rises by 18% and the cost of raw material falls by 6 ¼%, find the
reduction in other expenses in order to maintain the same production cost
 In the election 6% of the votes cast were invalid. A candidate gets 55% of the
total valid votes and wins the election by 1,880 votes. Find the total number
of voters who votes (i.e the number of votes cast) (there are only two
candidates)
 In an examination 70% examinees passed in Business Mathematics and 65%
in Financial Accounting while 15% failed in both the subjects. If 2,700
examinees passed in both the subjects, find the total number of examinees?
 PROBLEMS - PERCENTAGE
 When the cost of sugar increases by 40% a consumer reduces his consumption by
20%. Find the percentage change in his expenditure on sugar
 A reduction of 20% in the price of oranges enables a man to buy 5 oranges more for
Rs 100. Find the reduced price and the price before reduction
 A milkman has two types of milk. In one the percentage of water is 10% and in the
second the percentage of water is 20%. If he takes 90 litres of milk of Type 1 and 60
litres of Type 2 and prepare a new mixture, what is the percentage of water in this
new mixture?
 In an examination of MPPSC there are five subjects and carry equal maximum
marks. A candidate’s marks are in the proportion of 3:4:5:6:7 and his aggregate of
marks is 3/5 (or 60%) of full marks
 In how many subjects did he get more than 50 % marks (more than half of the total marks)
 In how many subjects did he get more than 20% of the maximum marks?
 If Ram earns 3% on one-fourth of his capital, 5% on two-third of his capital and
11% on the remaining capital. How much percentage of yield does he get on his
total capital?
 Video Link

 Concept of Percentage http://youtube.com/watch?

v=aldPGpTm22Q
THANK YOU
 BUSINESS MATHEMATICS
UNIT 1 – COMMISSION, BROKERAGE &
DISCOUNT

DR. RAJESH CHABA

 TOPICS
1 Meaning and Definition
2 Types of Commission
3 Types of Discount
4 Numerical Problems
 Commission

 The terms commission and discount are commonly applicable

in the business world. We should clearly understand the
terminologies before solving questions related with them.
 Having transacted the business transactions, the agents will
require remuneration from their principal. This remuneration
is known as Commission. Usually the commission is
calculated on the basis of the percentage of total sales done by
the agent.
 Commission = Amount of Sale x Rate of Commission
 Illustration on Commission

How many bottles of oil a sales girl needs to sell at Rs.9.55 per
bottle to earn a commission of Rs. 95.55 @ 5% ?
Solution:- Commission on 1 bottle = 9.55 x 5% = 9.55 x 5/100 =
9.55/20
No. of bottles = Total commission received/ Commission
received per bottle = 95.50 ÷ 9.55/20 = 95.50 x 20/9.55 No. of
bottles = 200
 Who is an Agent?
 Businessman may not be directly doing the business
transactions themselves because of expanded area of
business. They may employee persons to be doing
the selling or buying on their behalf. Such person are
known as Agents.
 Agents get commission against their work
performance.
 Who is a Broker?
 Broker - The buyer and seller of securities may not come into contact face to face.
Their transaction may be made possible by a middleman. He negotiates the sales and
purchase proceeds between the buyer and seller. Such a negotiator is known as broker.
 Brokerage – This is the remuneration paid to the broker. It is actually a commission
paid to the broker. It is calculated on the basis of percentage of the total value of the
business transacted by the broker.
 Del Credere Agent/Commission – A person or an institution that helps in selling the
goods on credit and take responsibility to collect this amount is called ‘Del-credere
Agent’. According to the condition, if the amount of credit sales is not collected, then
the agent will have to pay it to the principal from his side. In lieu of this risk along with
‘General Commission’ he is given an additional commission which is called ‘Del-
credere Commission’ and which is computed only on credit sales, whereas the
computation of General Commission is done on total (cash + credit) sales.
 Bonus. Some amount is given to the agent when the sales through him/her is more than
a predetermined amount. This amount os called a ‘Bonus’.
 Travelling Agent – This is a person who moves round the trading zone of the principal
doing the selling proceeds.
 Problems - Commission
 An agent gets a commission of 10% on the same price of a good. Find the amount
of his commission if the sales amount to Rs 5,000.
 A firm offers salary of Rs 700 plus a commission of 5% on sales or only
commission at the rate of 15%. If the average monthly sales amount to Rs 8,400
which of the terms would he prefer?
 A scooter was sold for Rs 8,000 through an agent. The agent charged his
commission at the rate of Rs 1% from purchaser and 1½ % from the seller. Find
his commission
 An agent is allowed 5% General Commission and 2% Del-credere Commission.
His cash and credit sales were Rs 1,000 and Rs 2,000 respectively. How much
commission will he get?
 An agent gets 3% commission on the full sale and 1 ½ % bonus on the amount of
the sale exceeding Rs 20,000. He sold goods amounting to Rs 35,000. Calculate
his commission, bonus and full renumeration
 An agent gets Rs1,275 as commission @7 ½ % on sales. Find the amount of sales.
 Problems - Commission
 How many pens an agent need to sell at Rs 8.55 each to earn a commission
worth Rs 85.50 at the rate of commission of 5%.
 An agent gets Rs 2,240 as monthly salary and 5% commission on sales. He
has a choice to accept only commission @33%. Find the amount of sales if he
gets equal amount in either case of renumeration.
 A salesman gets a salary of Rs 100 per month and a commission at the rate of
4% on sales in excess of Rs 20,000. If he wants to earn Rs 500 in a month,
how much should be his sales for that month?
 Mr Deepak is paid commission of 5% on cash sales and 4% on credit sales. If
on a total sales of Rs 50,000 he is apid Rs 2,400, find the amount of cash and
credit sales
 An agent charges 5% commission on cash sales and 9% on credit sales. If his
overall return is 7 ½ % on total sales, find the ratio between the two sales.
 The monthly sales of an agent is Rs 25,000. In the end of the year he sends RS
2,60,250 to his principal. Find the percentage rate of commission
 Manager’s Commission
 In a business , manager is paid an amount in addition to his salary in
the form of an allowance to motivate him; this amount is called
Manager’s Commission or Bonus.
 Formula
 Manager’s commission on total sales = Total Sales x Rate of commission
on total sales / 100
 Total sales = Manager’s commission x 100 / Rate of commission on total
sales
 Manager’s commission on the net profit = Net profit x Rate of
commission on net profit / 100
 Manager’s commission on total profit = Total profit x Rate of
Commission on total profit / 100
 Total Profit = Manager’s commission x 100 / Rate of commission on
total profit
 Problems - Commission
 A manager receives a commission of 10% on the gross turnover and bonus of 5%
on the sum exceeding Rs 6,000. If he gets Rs2,600 as commission, find the amount
of bonus.
 After charging the manger’s commission the net profit of Shri Aayush Jain is Rs
16,835. 9 % of total profit as commission is allowed to the manager. Find
manager’s commission and total profits
 In a firm the manager is paid a commission of 8% of the difference between total
profit and of the firm and the manager’s commission. If the total profit is Rs
23,112, find manager’s commission
 An agent is entitled to a commission of 4% on the total turnover and a bonus of
2% on the amount of sale exceeding Rs 20,000. If his total remuneration is Rs
2,000, find the amount of total sale and Bonus
 A publisher gives to his agent a fixed amount per year plus a fixed per cent on the
orders received. He paid Rs 3,970 in 1996 and Rs 4,330 in 1997. Find the fixed
amount given per year and the rate per cent of commission. The amount of orders
received in 1996 and 1997 was Rs 36,000 and Rs 43,000 respectively
 Problems - Brokerage
 A person sold a house for Rs 36,00,000 through a broker and gave
Rs 21600 as brokerage. Find the rate percent of brokerage.
 An agent sells a house and after deducting 6 2/3% brokerage pays
Rs 28,500 to the owner of the house. Find the cost of the house
 A broker charges brokerage @0.75% from the seller and 1.5%
from the buyer of a house. If he gets a brokerage of Rs 4,050,
calculate how much amount of brokerage is received from the
buyer as well as seller and what is the price of the house sold?
 A property changed hands. Each broker who sold it charged 1 %
as brokerage. If each time it was sold the net amount at the
previous sale, calculate its original sale value, if the third sale
realised Rs 1,00,000 net.
 Important formulae

i) Amount of commission =
𝑅𝑎𝑡𝑒 𝑜𝑓 𝑐𝑜𝑚𝑚𝑖𝑠𝑠𝑖𝑜𝑛 𝑋 𝐴𝑚𝑜𝑢𝑛𝑡 𝑜𝑓 𝑠𝑎𝑙𝑒𝑠 / 100
ii) Rate of commission =
𝑅𝑎𝑡𝑒 𝑜𝑓 𝑐𝑜𝑚𝑚𝑖𝑠𝑠𝑖𝑜𝑛 𝑋 100 / 𝐴𝑚𝑜𝑢𝑛𝑡 𝑜𝑓 𝑆𝑎𝑙𝑒𝑠
iii) Amount of Sales =
𝑅𝑎𝑡𝑒 𝑜𝑓 𝑐𝑜𝑚𝑚𝑖𝑠𝑠𝑖𝑜𝑛 𝑋 100 / 𝑅𝑎𝑡𝑒 𝑜𝑓 𝑐𝑜𝑚𝑚𝑖𝑠𝑠𝑖𝑜𝑛
iv) Amount of Del-cradere commission =
𝐶𝑟𝑒𝑑𝑖𝑡 𝑆𝑎𝑙𝑒𝑠 𝑋 𝑅𝑎𝑡𝑒 𝑜𝑓 𝑑𝑒𝑙 −𝑐𝑟𝑒𝑑𝑎𝑟𝑒 𝑐𝑜𝑚𝑚𝑖𝑠𝑠𝑖𝑜𝑛 / 100
 DISCOUNT
 The allowance or deduction from the market price
of goods sold given by the vendor (Seller) to the
purchaser (Buyer) is called discount. Discount is
also known as allowance.
 The objective of allowing discount are –
1. To increase the sales
2. To retain the customers
3. To encourage the customers to make the payment
early
 Kinds of Discount
General there are two types of discounts are allowed to the customers – Trade
Discount and Cash Discount
 1) Trade Discount – The Discount which is allowed by the seller according to the

customs and traditions of the Business and which is allowed to all the customers
irrespective of the payments conditions is called Trade Discount. The objective
allowing Trade Discount is to increase the sales.
 2) Cash Discount – The deduction on the marked price or invoice price or the

selling price to the customer to encourage them to pay in cash or to make earlier
cash payments is called cash discount. In general Trade discount is given on
marked price and cash discount is given on the remaining amount after deducting
trade discount.
 In this way the purchaser in cash is entitled to get both type of discount. Apart from

these two discounts, there are some more types of discount. Bulk discount or
Quantity discount – It is allowed to the customers on purchasing on good in big
quantity or bulk quantity.
 Problems - Discount
 Find the rate per cent of discount if a scooter which costs Rs 80,000 was purchased for Rs 78,000.
 The sale price of 40 copies of a book is equal to the total printed price of its 32 copies. Find the
rate of trade discount
 A shopkeeper paid Rs 493 for a parcel of 50 articles on which he had been given a discount of 15
%. Find the list price of one article
 From the following particulars, calculate remuneration payable to the agent.
 Printed Price = Rs 8,000
 Trade Discount on sales = 10%
 General Commission on sales = 5%
 Bonus on sales in excess of Rs 5,000 = 1%
 A publisher supplies 22 copies for very 20 copies of the book ordered and also allows a cash
discount of 10 %. What is the net rate of discount to the buyer
 After allowing 20% Trade Discount and 5 % cash Discount a commodity was sold for Rs 395.20.
Find the list price of that commodity
 A manufacturer makes a clear profit of 20% on cost after allowing 17 ½ % discount. If the cost of
production rises by 20%, by what percent should he reduce the rate of discount so as to make the
same profit keeping the list price unaltered.
Continue..
 Successive Discount – When another discount is given after a discount, then the
combination of these two discounts are known as successive discounts.
 Equivalent Rate of Discount – The discount for which the amount due is equal to
the amount due for successive discount is called their equivalent discount.
Equivalent discount rate is also called single rate of equivalent discount. It is to be
noted that the total amount of successive discount is equal to the among of
equivalent discount. Formula for Equivalent Discount
 D = d1 + d2 - d1d2 /100
 The discounts d1 + d2 + d3 … are called ‘Nominal Rate of Discount’ and the
single rate equivalent D may be called as ‘Real Rate of Discount’
 For example: If a trader allows successive discount of 20% and 5% then the
single rate/equivalent rate of discount will be D = 20 + 5 – 20 x 5 / 100 = 25 – 1
= 24%
 If C is the List Price of an item and a number of successive discounts (d1 , d2 , d3,
dn…) have been given then the Net Price will be given by the formula
 Net Price = C(1 + d1/100) (1+ d2/100) (1 + d3/100)+ …(1 + dn /100)
 NINE-VALUE TABLE
 It is a method of calculating discount on a certain sum of list price/marked price.
In this method on the basis of rate given first of all we have to calculate the
discount for Rupee 1 and accordingly for Rupees 2, 3, 4, 5, 6, 7, 8 and 9. With
the help of this table we can calculate the commission or discount on any
quantity.
 Let the Rate of Discount be 7 ½ % i.e the discount on Rs 100 is Rs 7.50. Then
discount on Rs 1 = 7.5/100 = .075. Nine Value Table is given below:-

r Discount r Discount
1 1x .075=Rs .075 6 1x .075=Rs .450
2 1x .075=Rs .150 7 1x .075=Rs .525
3 1x .075=Rs .225 8 1x .075=Rs .600
4 1x .075=Rs .300 9 1x .075=Rs .675
5 1x .075=Rs .375
 Problems – Successive Discount

 Find single rate discount for successive discounts of 20%

and 5%
 A businessman allows 5% + 3% + 2% discount on his
goods. Find the real and nominal rte of interest.
 Consider the following discounts and show whether in
these three situations amount due are same or not:-
 10% + 5% + 3%
 10% + 3% + 5%
 5% + 3% + 10%
THANK YOU