This document provides formulas and examples for calculating profits, losses, discounts, and marked prices. It defines key terms like cost price, selling price, marked price, discount, and percent discount. It provides examples of calculating discounts and profits/losses for various scenarios involving single or successive discounts. The examples demonstrate calculating discounts on goods that are initially priced or marked up from the cost price by the retailer or wholesaler. The document also distinguishes between trade discounts provided by manufacturers/wholesalers and cash discounts provided by retailers to encourage prompt payment.

1. Strand A: Chapter 3 Discount
Profit and Loss Formulas:
i. Profit or Gain = S. P. − C. P. profit is made only when S. P. is greater than C. P.
ii. Profit% =
Profit
C.P.
× 100%
iii.Loss = C. P. − S. P. (Loss is made only when C. P. is greater than S. P. )
iv.loss% =
Loss
C.P.
× 100%
v. C. P =
100
100 + Profit%
× S. P(if profit is made)
vi.C. P =
100
100 − Loss%
× S. P(if loss is made)
vii.S. P =
100 + Profit%
100
× C. P if profit is made
viii.S. P =
100 − loss%
100
× C. P if loss is made
ix. S. P = M. P − Discount

2. x. Discount = %D × M. P
xi. Discount = Marked Price M. P − Selling Price S. P
xii. %D =
Discount
M.P
× 100%
Marked price (M.P): The initial price assigned or written to the items.
Discount: It is the amount that is taken off the marked price to encourage a purchase or the
difference between the marked price (M.P) and the selling price (S.P).
𝑫𝒊𝒔𝒄𝒐𝒖𝒏𝒕 = 𝑴𝒂𝒓𝒌𝒆𝒅 𝑷𝒓𝒊𝒄𝒆(𝑴. 𝑷) − 𝑺𝒆𝒍𝒍𝒊𝒏𝒈 𝑷𝒓𝒊𝒄𝒆(𝑺. 𝑷)
Discount: It is the percent discount (%D) of the marked price (M.P)
𝑫𝒊𝒔𝒄𝒐𝒖𝒏𝒕 = %𝑫 × 𝑴. 𝑷
Percent Discount (%Discount): is the percentage of the marked price that the discount
represents or the ratio of discount to the marked price times hundred percent.
%𝑫 =
𝑫𝒊𝒔𝒄𝒐𝒖𝒏𝒕
𝑴. 𝑷
× 𝟏𝟎𝟎%

3. Types of DISCOUNT
1. Trade Discount
A trade discount is the reduction in price a
manufacturer or wholesaler gives a
wholesaler or retail when they buy a
product or group of products. In other
words, a trade discount is a certain
percentage a manufacturer is willing to
reduce its list price for wholesalers or
retailers.
2. Cash Discount
A cash discount is a deduction
allowed by some sellers of goods or by
some providers of services in order to
motivate customers to pay within a
specified time.

4. TRADE DISCOUNT VS CASH DISCOUNT
TRADE DISCOUNT
1. It is a reduction granted by a supplier
from the list price on goods.
2. It is done to promote the sales
3. Its entry is not done in the books of
accounts.
4. It vary with the quantity purchased.
CASH DISCOUNT
1. It is a reduction granted from the
invoice price in consideration of
immediate payment.
2. It is done to encourage early or
prompt payment.
3. It is shown as an expenses in profit
and loss account
4. It varies with the period.

5. Problems on cash and Trade Discount
Example 1. An electric fan is priced at Nu 360 and is sold at a discount of 10%. There is
further off season discount of 5% on the net amount. What does the customer pay for the
fan?
Solution: Given, 𝑀. 𝑃 = 𝑁𝑢 360, %𝐷 = 10%, D = ?
𝐷𝑖𝑠𝑐𝑜𝑢𝑛𝑡 = %𝐷 × 𝑀. 𝑃 = 10% × 360 =
10
100
× 360 = 36
𝑆. 𝑃 = 𝑀. 𝑃 − 𝐷 = 360 − 36 = 324
𝑂𝑓𝑓 𝑠𝑒𝑎𝑠𝑜𝑛 𝑑𝑖𝑠𝑐𝑜𝑢𝑛𝑡 = %𝐷 × 𝑆. 𝑃 = 5% × 324
=
5
100
× 324 = 𝑁𝑢 16.20
𝐶𝑜𝑠𝑡 𝑃𝑟𝑖𝑐𝑒 = 𝑆. 𝑃 − 𝐷 = 𝑁𝑢 324 – 𝑁𝑢 16.20 = 𝑁𝑢 307.80
Hence, the customer pays Nu 307.80 for the fan.
Example 2. An earphone is listed at Nu 650 and is sold at a discount of 10% by a mobile
shop. During Thimphu Tshechu, the shopkeeper announces further discount of 10%.
Determine the selling price of the phone. How much would he lose if he announces a single
discount of 20% instead of two successive discount of 10%?
Solution: Given, M. P = Nu 650, %D = 10%, D = ?

6. Discount = %D × M. P = 10% × 650 =
10
100
× 650 = 65
Net price = M. P − D = 650 − 65 = Nu 585
Tshechu discount = %D × Net price = 10% × 585 =
10
100
× 585 = Nu 58.5
Selling Price = Net price − D = Nu 585 – Nu 58.5 = Nu 526.5
For single, Given, M. P = Nu 650, %D = 20%, D = ?
Discount = %D × M. P = 20% × 650 =
20
100
× 650 = 120
S. P = M. P − D = 650 − 130 = Nu 520
Difference = Nu 526.5 – 520 = Nu 6.5
Therefore, the shopkeeper would lose Nu 6.5
Example 3. A trader marks his goods at 20% above the cost price. If he allows a discount of 5% for cash
payment, what profit percent does he make?
Solution: Let 𝐶. 𝑃 = 𝑁𝑢 100, 𝑀. 𝑃 = 100 + 20 = 𝑁𝑢 120, %𝐷 = 5% , 𝐶𝑎𝑠ℎ 𝑑𝑖𝑠𝑐𝑜𝑢𝑛𝑡 𝐷 = ?
𝐶𝑎𝑠ℎ 𝑑𝑖𝑠𝑐𝑜𝑢𝑛𝑡 = %𝐷 × 𝑀. 𝑃 = 5% × 120 =
5
100
× 120 = 6
𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑝𝑟𝑖𝑐𝑒 = 𝑀. 𝑃 − 𝐷 = 120 – 6 = 𝑁𝑢 114
𝑃𝑟𝑜𝑓𝑖𝑡 = 𝑆. 𝑃 − 𝐶. 𝑃 = 114 – 100 = 𝑁𝑢 14
Profit% =
Profit
C.P.
× 100% =
14
100
× 100% = 14%
Therefore, profit percent is 14%

7. Example 4. A shopkeeper increases the prices of the
goods by 10% and then allows a discount of 15%. How
much has a customer to pay for an item initially priced
at Nu 30?
Solution: Given: Initial Price = Nu 30 , M. P =
? , %D = 10%
Marked price = 10% of 30 + 30
=
10
100
× 30 + 30 = 3 + 30 = Nu 33
Discount = D% of M. P =
15
100
× 33
= Nu 4.95
Selling price = M. P − D = 33 – 4.95
= 28.05
Therefore, the customer has to pay Nu 28.05
Example 5. The list price of a watch is Nu 160. A
retailer pays Nu 122.40 for it. He get successive
discounts of 10% another rate which is illegible. What
is the second discount rate?
Solution: M. P = Nu 160, S. P = 122.40, %D = 10%,
Net price =?
First discount = %D × M. P = 10% × 160 =
10
100
×
160 = 16
Net price = M. P − D = Nu 160 – Nu 16
= Nu 144
Second discount = net price − S. P
= Nu 144 – Nu 122.40 = Nu 21.60
𝑆𝑒𝑐𝑜𝑛𝑑 %𝑑𝑖𝑠𝑐𝑜𝑢𝑛𝑡 =
𝐷𝑖𝑠𝑐𝑜𝑢𝑛𝑡
𝑁𝑒𝑡 𝑝𝑟𝑖𝑐𝑒
× 100%
=
21.60
144
× 100% = 15%
Hence, the second discount is 15%

8. Example 6. A machine is marked at Nu 5900 and
is available at a discount of 10%. The shopkeeper
gives the buyer another off-season discount and
sells the machine at Nu 4779. find the off-season
discount.
Solution: M. P = Nu 5900, S. P = 4779, %D =
10%, Net price =?
Discount = %D × M. P = 10% × 5900
=
10
100
× 5900 = 590
Net price = M. P − D
= Nu 5900 – Nu 590 = Nu 5310
off − season discount = net price − S. P
= Nu 5310 – Nu 4779 = Nu 531
off − season %𝑑𝑖𝑠𝑐𝑜𝑢𝑛𝑡 =
𝐷𝑖𝑠𝑐𝑜𝑢𝑛𝑡
𝑁𝑒𝑡 𝑝𝑟𝑖𝑐𝑒
× 100%
=
531
5310
× 100% = 10%
Hence, the off − season %𝑑𝑖𝑠𝑐𝑜𝑢𝑛𝑡 is 15%
Example 7. A dealer buys an old scooter listed at Nu 2600 and
gets successive discount of 5% and 10%. He spends some
amount on its repair and sells it for Nu 2750, thereby gaining
10%. Find the amount spent by the dealer on repairs.
Solution: M. P = Nu 2600, S. P = 2750, %D = 5%,
Net price =?
First discount = %D × M. P = 5% × 2600
=
5
100
× 2600 = 130
Net price = M. P − D = Nu 2600 – Nu 130
= Nu 2470
Second discount = %D × Net price = 10% × 2470 =
10
100
×
2470 = 247
Futher Net price = net price − D
= Nu 2470– Nu 247 = Nu 2223
Now, S. P = 2750, Profit % = 10%, cost price = ?
WKT, C. P =
100
100 + Profit%
× S. P
=
100
100 + 10
× 2750 =
100
110
× 2750 = 2500
𝐴𝑚𝑜𝑢𝑛𝑡 = 𝑐. 𝑝 − 𝑛𝑒𝑡 𝑝𝑟𝑖𝑐𝑒 = 2500 − 2223 = 227

9. Student Activity
1. A dinning table is marked at Nu 1500 with 10% and 20% off. An additional
discount of 5% is allowed for cash payment. Find the selling price of the dinning
table for each payment. Ans: Nu 1026
2. An article is costing Nu 700 to a manufacturer who lists its price Nu 800. he
sells it to a trader at a discount of 5%. The trader gets further discount of 5% for
cash payment. Calculate
i.The amount that the trader pays to the manufacturer.
ii.The profit percent that the manufacture makes on the sales.
Answer: i. Nu 722 ii. 3(1/7)%
EXERCISE 26 (a) from BHSEC I Page Ch 26-4
All questions