In this presentation, I discuss about Trade Discount. I include sample problems involving the topic. Also, the terminologies when discussing trade discount is in this presentation as well like list price, discount rate, amount of discount, net price and net price factor.
3. 1. An item listed at P80.00 is subject to a trade
discount of 25%,
compute (i) Amount of Discount
(ii) Net Price
Amount of Discount = List Price x rate of discount
= P80.00 x 25%
= P20.00
Net Price = List Price – Trade Discount
= P80.00 – P20.00
= P 60.00
4. Using the Net Price Factor Approach:
Net Price = List Price x ( 1 - rate of discount )
= P80.00 x ( 1 - 0.25 )
= P80.00 x 0.75
= P60.00
1. An item listed at P80.00 is subject to a trade
discount of 25%,
compute (i) Amount of Discount
(ii) Net Price
5. 2. The 30% discount on rubber shoes amount to
P120.00. Compute the (i) list price and (ii) net
price of the shoes.
List Price =
𝐀𝐦𝐨𝐮𝐧𝐭 𝐨𝐟 𝐝𝐢𝐬𝐜𝐨𝐮𝐧𝐭
𝐫𝐚𝐭𝐞 𝐨𝐟 𝐝𝐢𝐬𝐜𝐨𝐮𝐧𝐭
=
P120.00
30%
= P400.00
Net Price = List Price – Amount of discount
= P400 – P120
= P280.00
6. 3. Find the rate of discount for the following:
(i) A shirt listed for P1,500 less a discount of P300
Rate of discount =
𝐀𝐦𝐨𝐮𝐧𝐭 𝐨𝐟 𝐝𝐢𝐬𝐜𝐨𝐮𝐧𝐭
𝐋𝐢𝐬𝐭 𝐏𝐫𝐢𝐜𝐞
=
𝐏𝟑𝟎𝟎
𝐏𝟏,𝟓𝟎𝟎
= 0.20 or 20%
7. 3. Find the rate of discount for the following:
Amount of discount = List Price – Net Price
= P450 – P375
= P75.00
Rate of discount =
𝐀𝐦𝐨𝐮𝐧𝐭 𝐨𝐟 𝐝𝐢𝐬𝐜𝐨𝐮𝐧𝐭
𝐋𝐢𝐬𝐭 𝐏𝐫𝐢𝐜𝐞
=
P75.00
P450.00
= 0.17 or 17%
(ii) A bull cap listed at P450 whose net price is
P375
8. 3. Find the rate of discount for the following:
List Price = Net Price + Amount of Discount
= P720 + P480
= P1,200
Rate of discount =
𝐀𝐦𝐨𝐮𝐧𝐭 𝐨𝐟 𝐝𝐢𝐬𝐜𝐨𝐮𝐧𝐭
𝐋𝐢𝐬𝐭 𝐏𝐫𝐢𝐜𝐞
=
P480.00
P1,200.00
= 0.4 or 40%
(iii) A jeans whose net price is P720 after a
discount of P480
9. Summary
Amount of Discount = List Price x rate of discount
Net Price = List Price – Trade Discount
Using the Net Price Factor Approach:
Net Price = List Price x ( 1 - rate of discount)
Rate of discount =
𝐀𝐦𝐨𝐮𝐧𝐭 𝐨𝐟 𝐝𝐢𝐬𝐜𝐨𝐮𝐧𝐭
𝐋𝐢𝐬𝐭 𝐏𝐫𝐢𝐜𝐞
