REVISION CHAPTER 5&6

CHAPTER 5 – TRADE AND CASH DISCOUNT

CHAPTER 6 – MARKUP AND MARKDOWN

1. A RM25000 invoice (including transportation cost of RM1,000) dated 15 January 2022

had trade discount of 20%, 15%, 10% and cash discount terms of 4/10, 2/20, n/30. If
the payment was settled two weeks from the date of invoice, find
(a) the single discount equivalent to the above trade discount, (Ans: 38.8%)
(b) the amount of trade discount, (Ans: RM9312)
(c) the amount of cash discount, (Ans: RM293.76)
(d) the amount of payment. (Ans: RM15394.24)

2. Wang Enterprise bought wood stoves from a wholesaler at a listed price of RM850 per
unit with trade discounts of 35% and x%. If the amount of trade discount obtained was
RM244.35, find the value of x. (Ans: 5%)

3. Raisha paid RM2,337 for a diamond ring after trade discounts of 25%, 18% and y%. If
the list price was RM4,000, find the total discount amount and the value of y.
(Ans: RM1663 ; 5%)
4. An invoice dated 11 March 2022 for RM5,300 inclusive of RM300 transportation charge
was paid on 31 March 2022. If the trade discount was 20% and the cash discount
terms were 5/10, 4/30, n/60, find
(a) the trade discount offered (Ans: RM1000)
(b) the cash discount if entitled (Ans: RM160)
(c) the amount paid (Ans: RM4140)

5. The invoice of RM5000 dated 24 March 2023 has trade discounts of 12%, 10% and
cash discount terms of 5/10, 3/25, n/40. The payment was made on 15 April 2023. Find
the;
(a) Single discount equivalent to the trade discounts given. (Ans: 20.8%)
(b) Net price after deducting the trade discounts. (Ans:RM3960)
(c) Total payment on 15 April 2023 (Ans: RM3841.20)

6. A retailer bought a chair at RM95 per unit. If the operating expenses are 5% of the cost
and the net profit is 8.5% of the cost, find the selling price of the chair.
(Ans: RM107.83)

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7. A baby doll was sold for RM35.90. If the net profit was 30% based on selling price and
the operating expenses were 10% based on cost, find the cost of baby doll.
(Ans: RM22.85)
8. Rosli buys vanilla cakes that cost RM150 per dozen and plans to obtain a gross profit
of 40% based on selling price. Find the selling price for each cake. (Ans: RM20.83)

9. A sewing machine manufacturer allows 35% of cost for operating expenses and 15%
of the cost for net profit. If the cost to produce one unit is RM400, find
(a) the selling price, (Ans: RM600)
(b) the gross profit, (Ans: RM200)
(c) the breakeven price of the sewing machine. (Ans: RM540)

Suppose during promotion, the sewing machine was sold at RM560. Determine if there
is any profit or loss incurred. How much is the profit or loss? (Ans: RM20)

10. A retailer bought washing machines for RM660 each. Operating expenses incurred
were 10% of the selling price. If the retailer made a 25% net profit based on selling
price, find
(a) The retail price, (Ans: RM1015.38)
(b) The gross profit obtained, (Ans: RM355.39)
(c) The breakeven price, (Ans: RM761.54)
(d) The maximum markdown that could be offered to customers so that there was
no profit or loss. (Ans: RM253.84)

11. A retailer received an invoice dated 21 February 2021 for the purchase of 100 ceramic
pots. The invoice amounted to RM4,400 including transportation cost of RM400. The
invoice offered cash discount terms of 4/15, 2/20, n/30. The retailer paid the invoice on
8 March 2021.
(a) Calculate the payment made on 8 March 2021. (Ans: RM4240)
(b) The retailer estimated a net profit of 20% based on the retail price. If the
operating expenses are 15% based on cost, find
i. the retail price of each pot; (Ans: RM60.95)
ii. the total gross profit; (Ans: RM1855)
iii. the maximum percentage of markdown that can be offered so that the
retailed would not incur any loss. (Ans:20%)

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REVISION CHAPTER 7

CHAPTER 7: INSTALLMENT PURCHASES

1. Hazran wanted to purchase an oven and she had two options to consider.
Option 1 Option 2
Cash price RM4040 RM4200
Down payment RM200 RM0.00
Interest rate 10% on the original 12% on reducing balance
balance

The number of monthly payments for both options was 18. For each option, calculate

i. the interest charged Ans: RM576, RM399

ii. the monthly payment Ans: RM245.33, RM255.50
iii. the installment price Ans: RM4616, RM4599

Based on installment price, which option should Hazran choose?

2. An LCD television set was purchased by making a down payment of RM400 followed
by 12 monthly payments of RM220 each. If the simple interest rate was 6% per annum
based on the original balance, calculate the cash price of the television set.
Ans: RM2890.57
3. Rashid purchased a RM4096 computer on the installment plan. He paid a down
payment of RM496 and the balance was settled by paying RM124 each month for 3
years. Determine the outstanding balance immediately after the 14th payment using
the Rule of 78. Ans: RM2397.78

4. A water filter was purchased by making a down payment of RM200 followed by 60

monthly payments of RM121.50. If the interest charged was 2% on the original
balance, find:
(a) the installment price for the water filter. Ans: RM7470
(b) The cash price of the water filter. Ans: RM6827.27
(c) the outstanding principal balance just after the 8th payment was made using the
Rule of 78. Ans: RM5818.96

5. Ahmad bought a motorcycle costing RM4200 by paying RM200 downpayment. The

balance was borrowed from a finance company and he pays monthly installments at a
rate of 16% on the reducing balance for 1 ½ years. Find the installment price.

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 Ans: RM4706.67
6. An audio system set is sold at RM8,000 cash can be purchased by making 10% down
payment and 24 monthly payments at 8% on the original balance. If the set is
purchased through the installment plan, find
(a) the total interest Ans: RM1152
(b) the installment price Ans:RM9152
(c) the monthly payment Ans: RM348
th
(d) the outstanding balance immediately after the 10 payment is made, using the
Rule of 78. Ans: RM4468.80