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The Mathematics of Buying: Trade Discounts and Series Discounts

This chapter explores trade discounts and series discounts in the context of buying. Learn how to calculate net costs and find the net cost equivalent for various series discounts.

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The Mathematics of Buying: Trade Discounts and Series Discounts

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  1. The Mathematics of Buying CHAPTER Seven

  2. Trade Discounts Section 7.1

  3. Trade Discounts • Often given to businesses or individuals who buy an item for resale. • Seller given the price of the item as its LIST price. • NET cost (or Net Price) is the amount paid by the buyer

  4. Finding the NET COST • Net Cost = List Price – Trade Discount • EX: A wine refrigerator has a list price of $589.99 and a trade discount of 35%. Find the net cost. • This is an example of a Single Discount

  5. SERIES DISCOUNTS • Sometimes, 2 or more discounts are combined into a series (or chain) discount. • One way to find a series discount is to calculate each discount separately: • Calculate the 1st discount, subtract from List Price • Then calculate the 2nd discount using the new total.

  6. Series Discount Example: • A 12-place setting of stainless steel flatware is list priced at $249.99. If a series discount of 10/15 is offered, what is the net cost after the series discount is taken?

  7. Finding a Series Discount using Complements • To find the complement of a %, subtract it from 100%. Instead of the % discount, it now represents the % cost. • NOTE: table of some common complements is on p. 267

  8. A supplier offers a series discount of 25/15 on a waffle iron. If the list price of the iron is $135, use the complements of each of the single discounts to find (a) the net cost and (b) the amount of discount. • A 22.2 cubic-ft bottom freezer refrigerator is list priced at $2249.99. What is the net cost after a series discount of 15/20/5?

  9. Net Cost Equivalent Table • See table on P. 268 • This gives us ONE number to multiply by the list price to find Net Cost!

  10. Use the table to find the net cost equivalents for each of the following series discounts: • A) 30/5 B) 10/40 • C) 20/15/10 D) 10/5/5 • If the list price is $2354.95 and the series discount is 10/5/5, what is the net cost?

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