Discounts (Part II)

Continuing on the last article, the second discount type is known as Cash discount. This is very tricky as a problem solving but it is just as important as the others. Cash discount focuses on the time interval of the payment. And it’s common for you to see terms like 10/15 or n/30. It basically means that a discount of 10% may be deducted from the total amount of payment if it is done in 15 days and if 15 days has passed, the full payment will be given at the end of 30 days starting from the date of invoice.

their is actually no formula to remember in this discount but the crucial part is having a calendar beside you and the terms of the payment. here is a list of days per month:

  January      31

  February    it depends

  March        31

  April          30

  May           31

  June           30

  July            31

  August       31

  September  30

  October      31

  November  30

  December  31

knowing how to compute for discount is also needed.

to remember the dates more easily you can visit this website http://www.eudesign.com/mnems/dayspcm.htm 

paying early is a good practice and it also gives us a special reward of discount!  

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sample problem: An invoice in the amount of P5,500 was dated on September 24 and grants the following terms 10/5, 5/10, and n/30. The date of payment was on October 23.

SOLUTION

since the date of payment was included in the problem, you just need to find if the buyer acquired a discount on the terms given. And starting from September 25, the days that has elapsed is 29 days so no discount will be given. the answer is still P5,500 

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checked by Prof. Cris Paner 

Discounts (Part I)

07/13/2012 - SALE! 30% off! 50% off! and many more % off. These are ways for businesses to attract audience and buy their product. Building a brand loyalty to them is a way for them to grow more money since they are the ones who will buy and use it. And one of the common strategies for them is giving a less.

Discount is the reduction of payment to the product.Different business have different kinds of discounts all for us to be attracted to buy to their product more. But there are also other reasons for discounts like they have new version of the stocks and needs to get rid of it or because it is required by the government like the senior citizen discount. But whatever the reason is, discount is an important factor in businesses. And one should learn how to compute discounts.

their are 3 different ways of computing discount (two will only be tackled and will be broken into two parts) which is:
Trade Discount. And there are 2 sets of formulas to remember:

[Set 1]
Trade Discount = list price x trade discount rate
List Price =     Trade Discount       
                    Trade Discount Rate

Trade Discount Rate = Trade Discount
                                          List Price

[Set 2]
Invoice Price = List Price - Trade Discount
List Price = Invoice Price + Trade Discount
Trade Discount = List Price - Invoice Price

Knowing how to compute for discounts is handy specially when you are short n money and wants to buy this and that.

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sample problem: A study table was placed on a shop with a sign of 30% discount with the original price of P3,500.00. Find the amount of discount and invoice price.

SOLUTION:

   Trade Discount = List Price x Trade Discount Rate
                             = P 3,500 x 0.3
                             = P 1,050

   Invoice Price = List Price – Trade Discount
                         = P 3,500 – P 1,050
                         =  P2,450

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checked by Prof. Cris Paner