Topics

 Simple and Compound Interest.

 Annuity
 Mark-up and Mark-down.

Introduction

Markup and Markdown Price

Businesses are in business to earn a profit or a financial benefit from the work or products being sold. If
a business does not make a profit, it will not stay in business very long. Businesses use markup and
markdown prices to influence their profit margin (the amount of profit they make).

Markup prices can be defined as the increase (by percentage) in the price of a product based on its
original cost.

Markdown prices are the rate (markdown percentage) decrease in the selling price of a product from its
original selling price. The term discount is a more common term to describe markdown prices. When
companies offer sales (like 25% off, etc.) they are applying markdown prices to their products.

Realization-

My realization is that running a business is very challenging cause you need to “earn” from it to make it
afloat. But at the same time, businesses should not just be all for profit, there should be a “win-win”
scenario for both the seller and the buyer. Striking the balance not to “overprice” and give sensible,
quality product will spell the difference in succeeding any form of business.

Application-

This topic will greatly aid my future self should I embark in putting up a business of my own. However,
for my chosen career, it can still be valuable and applicable in terms of commercializing products or
services that I will be “selling” thru my future IT company because I believe that all companies are in the
business of “selling something”. Again, marking up of prices is essential to “earn” profit and marking
down prices is usually a tool to dispose inventory or increase sales.
What is Annuity

An annuity is a fixed amount of money that you will get each year for the rest of your life. An annuity is a
contract between you and an insurance company that requires the insurer to make payments to you,
either immediately or in the future. It helps you to get a regular payment for life after making one lump
sum payment or a series of instalments.

Realization-

What I realized is that it pays to be financially prepared and the earlier I start on it, the better. Buying
annuity from an insurance company secures the financial aspect of whatever future needs I will have. I
realized that being prudent is something that any young people should aspire to start early on. While we
trust God for our future, saving up or securing an insurance is a man’s practical way to do something in
preparation for any uncertainties of the future like old age, sickness or other emergencies. This would
not just aid my future self but also my future family.

There are many reasons to buy annuities, depending on your lifestyle needs. Among other benefits, they
can provide you with guaranteed income for life, a way to provide for your loved ones, protection
against losing your initial investment and help with long-term care costs. Some people think annuities
are complicated, partly because they come in so many varieties. But they’re more like ice cream in that
sense because they come in many flavors, allowing you to select the kind that suits you.

Application-

We realized how important financial literacy is for young people like us. We need to be wise with our
money and understand how its money works.

Every day, mathematics influences our financial decisions. We use math to budget, spend, save, and
invest. Financial literacy helps us know and understand different financial instruments, such as stocks,
bonds, ETFs, and creating an investment plan.
About Simple Interest and Compound Interest

Interest is defined as the cost of borrowing money, as in the case of interest charged on a loan balance.
Conversely, interest can also be the rate paid for money on deposit, as in the case of a certificate of
deposit. Interest can be calculated in two ways: simple interest or compound interest.

 Simple interest is calculated on the principal, or original, amount of a loan.

 Compound interest is calculated on the principal amount and the accumulated interest of
previous periods, and thus can be regarded as “interest on interest.”

Realization/Application-

as simple interest in your life do you think you will prosper? The answer is not because what you learned
is just one thing. But if you have compound interest and what you have learned, you will grow, and you
will know because what you have learned is not just one thing but many things. What I mean here is
something for you to learn the upgraded version when you first need to know the next ones so you can
learn everything. For short, if you relate this to your life, the compounded interest will make you
successful in real life because people will be more prosperous if they know more about life.

Career-

You can make a career out of this. Like being an investment banker, these are investment professionals
who combine financial services industry expertise, analytical prowess, and effective persuasive
communication skills to support institutional clients in activities like capital raising and mergers and
acquisitions. And also, an actuary, a business professional who analyzes the financial consequences of
risk. Actuaries use mathematics, statistics, and financial theory to study uncertain future events,
especially those of concern to insurance and pension programs.