CHAPTER 7:

DISCOUNT

Discount

• Find the trade discount using a single trade discount rate; find the net price using the trade discount.

• Find the net price using the complement of the single trade discount rate.

Key Terms

• Trade discount: the amount of discount that the wholesaler or retailer receives off the list price or the difference between the list price and the net price

• Net price: the price the manufacturer or retailer pays or the list price minus the trade discount.

• Discount rate: a percent of the list price.

Single Trade Discount

•Identify the single discount rate and the list price.

•Multiply the list price by the single discount rate.

Trade discount = rate x list price

Example

Find the trade discount for a cd player that retails at $120 and has a trade discount rate of 35%.

Example

1. Find the trade discount for a rug that lists for $290 and has a trade discount of 30%.

2. Find the trade discount for styling gel that lists for $18 and has a trade discount of 15%.

Net Price

Using the trade discount:•Identify the list price and the trade discount.•Subtract the trade discount from the list price.

Trade discount = Rate x List Price

Net Price = List Price – Trade discount

Example

Find the net price of a desk that lists for $320 and has a trade discount of 30%.

Trade discount =

Net Price =

Example

1. Find the net price of a camera that lists for $240 and has a trade discount of 45%.

2. Find the net price of a patio table that lists for $460 and has a trade discount of 20%.

Trade Discount SeriesManufacturer or wholesaler may offer more than one discount in the merchandise; for example three discounts of 25,15 and 5 may be offered on an item.

25/15/5 = 25% , 15%, 5%

25% take off the list price then the 15% is taken off the net price and finally 5% is taken off the second net price.

Trade Discount Series

A jewelry set consisting of a ring, a pendant, and earrings is listed at $120. A trade discount series of 20/10/5 is offered. Find the final net price of the set.

Compute first discount (20%)•T = R x L•N = L x T ………. Following the next discount•Total Discount =

Trade Discount Series

1. A table saw has a list price of $180. A trade discount series of 10/5 is offered. Find the amount of discount and the net price.

Trade Discount Series

1. A garage door has a list price of $210. A trade discount series of 10/5/3 is offered. Find the amount of the discount amount and the net price.

Cash Discount

Manufacturer or wholesaler will offer discounts to buyers in order to encourage them to pay their bills early. A time limit is given and if the bill is paid before the end of the time limit, the buyer can deduct the percentage of the bill.

Terms : 3 , n

10 30

three ten , net thirty

Cash Discount

An invoice has following terms: 3 , n

10 30

It is dated November 12. How much time does the buyer have to pay in order to get the discount.

Ans : 12 + 10 = 22 , The buyer can pay the bill anytime on or before November 22 in order to receive the 3% discount.

Cash DiscountAn invoice has following terms: 3 , n

15 30

It is dated November 24. What is the last day that the invoice can be paid in order to receive the discount.

Ans : Find number of days left in Nov

30-24 = 6

Count 9 days into December , since 15-6 = 9

Then the bill should be paid on or before December 9.

Cash DiscountAn invoice dated August 18 for 1 dozen belts costing $192 is sent to a retail store with the following terms: 3 , 2 , n . If the bill is

10 25 30

Paid on September 1, How much should the owner pay?

THE END