Question

A catering company buys some items with a list price of $5,000. If the supplier extends trade discount rates of 35/30/5, find the net price using the net price factor, complement method.

A photographer buys some merchandise with a list price of $7,000. If the supplier offers trade discount rates of 20/10/5, find the trade discount (in $). (Find the single equivalent discount first.)

Answer 1

Calculation of net price using complement method is shown below
100%-35%	65.00%	0.65
100%-30%	70.0%	0.7
100%-5%	95.0%	0.95
Net price factor	0.65*0.70*0.95
Net price factor	0.43225
Net price	5000*0.43225
Net price	$2,161.25
Thus, net price is $2,161.25
Calculation of single equivalent discount first is shown below
100%-20%	80.0%	0.8
100%-10%	90.0%	0.9
100%-5%	95.00%	0.95
Net price factor	0.80*0.90*0.95
Net price factor	0.684
Single equivalent discount	1-0.684
Single equivalent discount	0.316
Trade discount	7000*0.316
Trade discount	$2,212.00
Thus, trade discount is $2,212