Mathematics For Invesment

C H A L L E N G E
DISCOUNT
& DISCOUNT SERIES
G R O U P 5
Aloz.Briosos.Hadji-said.Ramos
DATE：OCTOBER 2019
Discount
a reduction made from the gross
amount or value of something
Types:
1.Trade discount,
2.Quantity discount, and
3.Cash discount.
Trade Discount
The amount which is deducted from the

price list of the goods sold is called a trade
discount. The seller fixes up invoice price or sale
price deducting trade discount from the listed
price. Trade discount is not accounted for.
Quantity Discount
If the sale amount crosses the minimum

target sale, the seller grants an excess discount
to the buyer. This excess amount of discount is
called quantity discount. It is included in the cash
discount which is shown on the challan/invoice.
Cash Discount
The seller grants some amount as a

discount to the debtor for the realization of the
outstanding sales within the term period of sales.
This is called a cash discount.
Trade discount = rate x list price
Find the trade discount for a cd player that
retails at $120 and has a trade discount rate of 35%.
Trade discount = 0.35 x $120

Trade discount = $42
What does the $42 mean?
That the wholesaler or retailer will not pay $42 of the
$120 list price.
Find the trade discount for a rug that lists for $290
and has a trade discount of 30%.
$87
Find the trade discount for styling gel that lists for
$18 and has a trade discount of 15%.
$2.70
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 = 0.30 x $320 = $96
Net price = List price – Trade discount
Net price = $320 - $96 = $224

Find the net price of a camera that lists for $240 and
$132
Find the net price of a patio table that lists for $460
and has a trade discount of 20%.
$368
II. Find the Net Price
Using the complement of the single trade discount
rate.
Complement of percent: the difference between

100% and the given percent.
Examples:
The complement of 30% is 70%.
The complement of 55% is 45%
The complement of 5% is 95%.
How to find the Net Price
1. Find the complement: subtract the single trade
discount from 100%.
2. Multiply the list price by the complement of the
single trade discount.
NP= list price x complement
Example:
Find the net price of a coffee maker that lists
for $20 and has a trade discount rate of 20%.
80% is the complement of 20%
NP = $20 x 0.80 = $16
Find the net price of a set of golf clubs that lists for
$1,500 and has a trade discount of 15%.
$1275
Find the net price of a bicycle that lists for $102 and
$71.40
Discount Series
Trade discount series or chain discount: additional
discounts that are deducted one after another from the list
price.
Reasons to use discount series include:

1. To encourage volume purchases
2. To promote special or seasonal items
3. To entice a new client
Trade discount series step by step
An item lists for $400 and has a discount of 20%.
$400 x 0.2 = $80; $400 - $80 = $320
An additional discount of 10% is taken on the previous price.
$320 x 0.1 = $32; $320 - $32 = $288
An additional discount of 5% is taken on the previous price.
$288 x 0.05 = $14.40; $288 - $14.40 = $273.60
$273.60 is the final price
Can you add the discounts together
and apply it as one?
If the item has three discounts of 20%, 10% and 5%,
can you add them together and apply a 35% discount?
No, because each time you apply the additional

discount, the base becomes smaller. Directly
applying a 35% discount would result in a final price
of $260.
$260 ≠ $273.60
III. To find the net decimal equivalent
of a trade discount series:
1. Find the net decimal equivalent: multiply the
decimal form of the complement of each trade
discount rate in a series.
2. Multiply the list price by the net decimal equivalent.
Example:
Find the net price of an order with a list price of
$800 and a trade discount series of 20/10/5.
Find the complement of each of the trade discount rates.

They are 0.80, 0.90 and 0.95.
Multiply them together.
The net decimal equivalent is 0.684
Apply the net decimal equivalent to the list price.
NP = 0.684 x $800 = $547.20
A tool set lists for $325 and has a trade discount
series of 20/10/10. Find the net price.
$210.60
A dress shirt lists for $125 and has a trade discount

series of 15/10/7.5. Find the net price.
$88.45
IV. Find Trade Discount
To find the trade discount by applying a trade
discount series and using the single discount
equivalent:
1. Find the single discount equivalent by subtracting

the net decimal equivalent from “1.”
2. Multiply the list price by the single discount
equivalent.
TD = single discount equivalent x list price
Single discount equivalent
the complement of the net decimal equivalent. It is the
decimal equivalent of a single discount rate that is equal
to the series of discount rates.
Total amount of a series of discounts
= single discount equivalent x list price
Net amount you pay
= net decimal equivalent x list price
Example
Use the single discount equivalent to calculate the
trade discount on a $3,200 lawn tractor with a discount
series of 30/20/10.
Find the net decimal equivalent by multiplying the complements of

each discount rate.
0.70 x 0.80 x 0.90 = 0.504
To find the single discount equivalent, subtract the net decimal
equivalent from “1.”
Subtract the net decimal equivalent (0.504) from “1” to
find the single discount equivalent.
The result is 0.496 (or 49.6%).
The single discount equivalent is 0.496; apply it to the
price of $3,200.
TD = $3,200 x 0.496 = $1,587.20
The trade discount on the tractor is $1,587.20.
That is the amount that you do not pay.
THANK YOU!
G R O U P 5
Aloz.Briosos.Hadji-said.Ramos
DATE：OCTOBER 2019

Mathematics For Invesment

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C H A L L E N G E

The amount which is deducted from the

If the sale amount crosses the minimum

The seller grants some amount as a

Trade discount = 0.35 x $120

Trade discount = Rate x List Price

Trade discount = 0.30 x $320 = $96

Net price = List price – Trade discount

Net price = $320 - $96 = $224

Complement of percent: the difference between

Reasons to use discount series include:

No, because each time you apply the additional

Find the complement of each of the trade discount rates.

A dress shirt lists for $125 and has a trade discount

1. Find the single discount equivalent by subtracting

Find the net decimal equivalent by multiplying the complements of

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