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Questions and Answers
Which one of these defines mark-up correctly?
Which one of these defines mark-up correctly?
- The difference between the cost and selling price of an item
- The value added to the price of an item to cover operating expenses and profit (correct)
- The decrease in price from the original sale price of an item
- The increase in price from the original sale price of an item
What is the definition of markdown?
What is the definition of markdown?
- The decrease in price from the original sale price of an item (correct)
- The difference between the cost and selling price of an item
- The increase in price from the original sale price of an item
- The value added to the price of an item to cover operating expenses and profit
What does principal refer to?
What does principal refer to?
- The amount of money borrowed or invested (correct)
- The current value of amount which is due at some future date
- The number of days, months or years that the money is borrowed or invested
- The percent of the principal paid as interest per time period
What is the definition of bank discount?
What is the definition of bank discount?
What is the definition of present value?
What is the definition of present value?
Which one of these defines simple interest correctly?
Which one of these defines simple interest correctly?
What is the definition of rate?
What is the definition of rate?
What is the definition of time?
What is the definition of time?
What is the definition of present value?
What is the definition of present value?
What is the definition of discounting?
What is the definition of discounting?
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Study Notes
Definitions of Key Financial Terms
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Mark-up: The amount added to the cost price of goods to cover overhead and profit, typically expressed as a percentage.
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Markdown: A reduction in the selling price of a product, often used to stimulate sales of slow-moving inventory.
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Principal: The initial sum of money borrowed or invested, upon which interest is calculated.
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Bank Discount: A deduction from the face value of a promissory note or bill of exchange, typically calculated at a fixed rate over a specified period.
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Present Value: The current worth of a future sum of money or a stream of cash flows, discounted at a specified interest rate.
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Simple Interest: Interest calculated on the principal amount only, without compounding. It is typically expressed as a percentage of the principal over time.
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Rate: The percentage at which interest is paid or calculated by lenders or earners on investments over a specific period.
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Time: The period over which interest is calculated or the duration until the maturity of an investment or loan.
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Discounting: The process of determining the present value of a payment or stream of payments that will be received in the future, factoring in a discount rate.
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