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