Word Problems . The interest, I ,earned on the amount, P , of money invested depends on the interest rate, i , and the time, T , the money is invested. Simple interest means that the interest, I , is determined using the total time period, e.g. 10 years, rather than compounding the interest, that is, adding the interest, I , to the amount, P , after each year.
Discount is the percent reduced on the price of an item.
Markup is the amount of increase when the cost of an item is increased a certain percent. The following examples will illustrate this concept. If the value is negative, that is the amount of the discount. The interest rate is assumed to be an annual rate. The percent discount is based on the initial cost.