<h3>Profit, loss, discount and commission</h3><p><strong>Profit</strong> = selling price - cost price; <strong>loss</strong> is the reverse. Percentage profit is <code>(profit ÷ cost price) x 100</code>. A <strong>discount</strong> is a reduction on the marked price; a <strong>commission</strong> is a percentage paid to a salesperson on sales.</p><h3>Simple and compound interest</h3><p><strong>Simple interest</strong> uses <code>I = (P x R x T) ÷ 100</code>, where P is principal, R the rate per year and T the time in years. <strong>Compound interest</strong> adds each period's interest to the principal, so the amount is <code>A = P(1 + R/100)^T</code>.</p><h3>Hire purchase, appreciation and depreciation</h3><p><strong>Hire purchase</strong> = deposit + (instalment x number of instalments). <strong>Appreciation</strong> increases value; <strong>depreciation</strong> reduces it, each computed like compound growth or decay.</p><div class="callout"><strong>Kenyan context:</strong> A mama mboga buys a sack of potatoes for KSh 1800 and sells it for KSh 2250. Her profit is KSh 450, a percentage profit of <code>450/1800 x 100 = 25%</code>. A Sacco lends KSh 20000 at 10% simple interest for 2 years, so the interest is <code>(20000 x 10 x 2) ÷ 100 = KSh 4000</code>. A motorbike bought at KSh 120000 depreciates 10% a year, so after one year it is worth <code>120000 x 0.9 = KSh 108000</code>.</div>
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An item bought for KSh 800 is sold for KSh 1000. The profit is: