Question

Not yet answered Question 4 Marked out of 2.00 Fas question Payten Pastner is responsible for Cummins Appliance Store's accounts payable department and has an invoice that shows a list price of $2,200 with a trade discount series of 25/15/10. Use the single discount equivalent to calculate the trade discount on the purchase. A B I - I

Answer 1

Solution-

Successive discounts are

D1 = 25% = 25÷100 = 0.25

D2 = 15% = 15÷100 = 0.15

D3 = 10% = 10÷100 = 0.10

Now single discount equivalent to these three successive discounts is

D = {1-(1-D1)(1-D2)(1-D3)}

D = {1-(1-0.25)(1-0.15)(1-0.10)}

D = {1-(0.75×0.85×0.90)}

D = 0.42625

Hence single discount = 0.42625×100

= 42.625%

List Price = $ 2200

Hence the trade discount = 42.625% of $2200

= 0.42625×2200

  = $937.75