FRACTION

A fraction is a number written in the form 𝐚 , where a and b are whole numbers but b cannot be zero.
The number on top, a is called numerator, and the number below, b, is called denominator.

Proper fraction is a fraction less than one. Its numerator is less than its denominator.

Improper fraction is a fraction greater than or equal to one Its numerator is greater than its
denominator.

Mixed number is the sum of a whole number and a proper fraction.

Similar fractions are fractions with the same denominators

Dissimilar fractions are fractions with different denominators.

A decimal is a representation of a fraction whose denominator is a multiple of 10.

A percent which means “per hundred” is a representation of a fraction whose denominator is 100.

RATION AND PROPORTION

A ratio is an ordered pair of numbers a and b, written a / b

where b does not equal 0. 
A proportion is an equation in which two ratios are set
equal to each other.

An equation showing two ratios that are equal is called a proportion.

A RATIO is comparison of two numbers or measurement. The terms of the ratio are the numbers
or measurements being compared.

DIRECT
Direct Proportion. It is the relationship between two variables when their ratio is equal to a constant
value. Say, 𝑦 is directly proportional to 𝑥 when the equation takes the form: 𝑦 = 𝑘𝑥, where k is the
constant term. In this proportion, an increase of one variable will also an increase of the other variable,
and a decrease in one variable will also the decrease of the other.

INVERSE
Inverse or Indirect Proportion. It is the relationship between two variables when
their product is equal to a constant value. Say, 𝑦 is inversely proportional to x
when the equation takes the form: 𝑦 = 𝑘/𝑥, where k is the constant term, or k=x*y.
This means that the two values x and y are inversely or indirectly proportional to
each other, such that if x increases then y decreases orif x decreases, y increases.

PARTITIVE
Partitive Proportion. A whole is divided into parts that is proportioned
into equal or unequal ratios.

BUYING AND SELLING

MARK UP
It is the difference between the selling price (S) and the cost price (C), and is sometimes referred to as
the margin or gross profit. It can also be defined as the sum of all expenses (E) and profit (P).

Markup is the
amount of money
that businesses add
to the cost they
incurred to
manufacture a
product or to an
item they purchased
that when they sell
them, they
can cover their
initial expenses and
make a profit
Markup is the
amount of money
that businesses add
to the cost they
incurred to
manufacture a
product or to an
item they purchased
that when they sell
them, they
can cover their
initial expenses and
make a profit
MARKUP RATE
Mark-up is based on cost if the cost is taken as the base to express the mark-up in terms of percent.

Mark-up is the amount by which the cost of a product is increased in order to derive the selling price. It
can also be defined as the sum of the expenses and profits.

MARK DOWN
Sometimes, to be able to stand against competitors in the market, sellers tend to lower the prices of
their goods.

DISCOUNT

discount refers to an amount or percentage deducted

from the normal selling price of something.

PROFIT
Profit is the money you have left after paying for
business expenses
LOSS

A loss is an excess of expenses over revenues,

either for a single business transaction or in
reference to the sum of all transactions for an
accounting period.
BREAK EVEN
Break-even analysis is the process used to determine the number of units of products to sell in order to
cover the costs. It is necessary for business owners to determine the quantity of products to sell for
them to avoid loss.

Break-even point is the number of units of goods or products needed to be sold in order to cover the all
the costs.

Net price is the final charge you pay for a product or service after discounts and sales taxes are
computed.

 Sales is the account used to report the selling price of the merchandise

Margin (also known as gross margin) is sales minus the cost of goods sold or cost of sales.

1. Fixed cost (FC) – This is the cost of expenses that does not vary over time on a certain relevant range,
the number of products sold, and production of goods to be sold. This may also include payment for
lease and rental, salaries of workers, insurance, and interests.

2. Variable Cost (VC) – This may refer to the amount of money spent for raw materials used in the
production of the goods including the labor, utility expenses, and commissions. This means that this cost
varies depending on the number of units of goods produced.

3. Total Cost (TC) – This is the sum of the fixed cost and variable cost.

4. Selling Price (SP) – This is the price of the product being sold.

INTEREST
Simple Interest – interest that is computed on the principal.

The interest remains constant throughout the term.

Lender or creditor – person (or institution) who invests the money or makes the
funds
Borrower or debtor – person (or institution) who owes the money or avails of the
funds from the lender

Origin or loan date – date on which money is received by the borrower

Repayment date or maturity date – date on which the money borrowed or loan is
to be completely repaid

Time or term (t) – amount of time in years the money is borrowed or invested;
length of time between the origin and maturity dates

Principal (P) – amount of money borrowed or invested on the origin date

Rate(r) – annual rate, usually in percent, charged by the lender, or rate of increase
of the investment

Interest (I) – amount paid or earned for the use of money

Maturity value or future value (F) –amount after t years that the lender receives
from the borrower on the maturity date

SIMPLE INTEREST
Simple interest is calculated on the principal amount or original amount of money. From the word
“simple”, this means that the interest that can be earned is directly from the principal amount invested
or borrowed.

COMPOUND INTEREST
Compound interest (�� ) is the interest computed on the principal and alsoontheaccumulated past
interest, so compound interest is a way to earn money becauseyou don’t just earn using your original
money, but also the interest youearned.

FUTURE VALUE OF MONEY

The future value of an annuity is the total accumulation of the

payments and interest earned
PRESENT VALUE OF MONEY

The present value of an annuity is the principal that must be

invested today to provide the regular payment of an annuity.
ANNUITIES
n ANNUITY is a
sequence of equal
payments (or
deposits) made at a
regular interval of
time.
A sequence of equal payments (or deposits) made at a
regular interval of time

ORDINARY ANNUITY

A general annuity in
which the periodic
payment is made at
the end of the
payment interval.
A general annuity in
which the periodic
payment is made at
the end of the
payment interval.
A general annuity in
which the periodic
payment is made at
the end of the
payment interval.
A general annuity in
which the periodic
payment is made at
the end of the
payment interval
A general annuity in
which the periodic
payment is made at
the end of the
payment interval
A general annuity in
which the periodic
payment is made at
the end of the
payment interval.
Which the periodic payment is made at the end of the payment
interval

ANNUITY DUE

Annuity due is an annuity whose payment is due

immediately at the beginning of each period.