Math help from the Learning Centre

How to use the formulas?

Example

An item values at $28 after discount. If a trade discounts series of 25%, 15%, and 10% were offered, find the original price.

Solution

What do we know? $28 is value after discounts ⇒ this is the net price (N = $28). There are multiple discounts (25% = 0.25, 15% = 0.15, 10% = 0.10).

What are we looking for? We are looking for the original price before discounts ⇒ find the list price.

The original price was $48.80.

Why are the multiple discounts of 25%, 15%, and 10% not the same as 25% + 15% + 10% = 50%?

Whereas the sum of discounts 50% of $100 equals $50.

To find the single rate from multiple rates. Use the formula.

d = 1 - (1 - 0.25)(1 - 0.15)(1 - 0.10) = 0.42625 or 42.625%

Designed by Matthew Cheung. This work is licensed under a Creative Commons Attribution 4.0 International License.