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 Series

Manufacturer 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 Discount
An 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 Discount
An 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