Packet 9: Discounts and Sales Tax: Method 1 Method 2

Name: ____________________________________________________ Period: _____
Packet 9: Discounts and Sales Tax

What is a discount?
________________________________________________________________________
________________________________________________________________________
There are 2 methods to calculate discount for an item. Use whatever method you like best.
Method 1 Method 2
1. Item Amount x Discount Rate = 1. Item Amount x (100% - Discount Rate)

Discount Amount = Sale Price
2. Item Amount – Discount Amount = Sale

Price
Use both methods to calculate the sale price of an item that costs $140 and has a discount of
40%.
Benefits of Method Benefits of Method

1. The original price of a shirt is $18. The shirt is on sale for a 20% discount. What is the
sale price of the shirt?
2. In a department store, a $40 dress is marked, "Save 25%." What is the discount? What
is the sale price of the dress?
3. In a grocery store, a $12 case of soda is labeled, "Get a 20% discount." What is the
discount? What is the sale price of the case of soda?
4. In a candy store, a $5.00 jar of candy is labeled, "50% off." What is the discount? What
is the sale price of the jar of candy?
5. In a bicycle store, a $500 bicycle is marked, "Get a 30% discount." What is the sale price
of the bicycle?
6. At best buy they have a 42” TV that sells for $1250 and is on sale for 15%. What is the
sale price?
Given the Sale Price and Discount Rate, find the Original Price.
A tennis racket is on sale for $70. It was discounted 10%. What was the original price of the
item?
Given the Sale Price and the Original Price, find the Discount Rate.
My sneakers cost $80. They were on sale for $32. What was the discount rate?
Original Price Discount Rate Work Space Sale Price
1. $212 39%
2. $812 13%
3. 49% $ 56.61
4. 19% $ 235.71
5. $315 $ 223.65
6. $831 $ 631.56
Series of Discounts
Sometimes businesses are rewarded with additional discounts. For example, Suzi’s Muffins may
receive an initial discount of 25% automatically. Then, gets an additional 20% if its accumulated
purchases were between $10,000 and $25,000 the previous year and another 10% if
accumulated purchases were more than $25,000 during the previous year. Therefore Suzi’s
Muffins could have discounts of 25%, 20%, and 10%, called a series of discounts.
Example 1
Federated Food Supply sells a set of mixing bowls for a list price of $480. Suzi’s Muffins
qualifies for the series of discounts: 25%, 20%, 10%. Calculate the net price using the discount
method.
Complement Method Shortcut
When using the complement rates, you can just multiply the list price by all of the complement
rates to calculate the net price. Try it for Example 1.
Example 2
Jack Hackett Roofing is purchasing redwood shakes to reroof a house. The shakes have a list
price of $14,400. The Northwest Roofing Company jives Jack the normal trade discount of
20%. In addition, Northwest gives Jack two further trade discounts of 10% and 5% because of
the large volume of business that Jack has done with Northwest so far this year. What is
Jack’s net price on the order of redwood shakes?
Calculating the Equivalent Single Discount Rate
How would you compare a company that offers a straight 45% discount to a company that offers
a discount series of 25%, 20%, 10%? Let’s say, something costs $100. Calculate the net cost
using both types of discounts.
Steps to Computing the Equivalent Single Discount Rate
Example: 25%, 20%, 10%
1. Calculate the complement of each rate.
2. Multiply the complement rates and write as a percent.
3. Subtract the product (percent) from 100% to get the equivalent single discount rate.
Example 1:
A series of discounts is 40%, 20%, and 5%. Find the equivalent single discount.
Practice the following by finding the equivalent single discount rate. Round to the nearest tenth
of a percent.
1. 30%, 20%, 5%
2. 20%, 10%, 5%
Find the complement rates and the net price using the Equivalent single Discount Rate:
3. List Price: $1,200 Trade Discounts: 50%, 40%, 10%
What is Sales Tax?
What is sales tax?

__________________________________________________________________________________________
__________________________________________________________________________________________
Where does sales tax go?

__________________________________________________________________________________________
__________________________________________________________________________________________
What items are taxed?
Taxed Exempt from Taxes

Adding Tax to Items
When you purchase items, a sales tax is added to the price of the item.
In Niagara County, they add an ________% sales tax.
Steps to figuring out Sales Tax and Total Cost of an item costing: $________
1. Change the percent to a decimal. _________% = __________

2. Multiply the decimal by the cost
of the item. This is the tax. ( _______ ) ( _______ ) = __________
3. Add the tax to the cost of the
item. _________ + ________ = __________
Example 1: Your bill comes to $32.46. Calculate the sales tax and the total bill with tax.
Directions
Use the worksheet below to help you determine what you can buy with $100. Calculate all sales
taxes and add them to the cost. Add up all of the total costs of the items. You must purchase
five items (no more and no less). Whoever is closest to $100 without going over will win a special
prize.
Item Selling Tax Total Cost

Price
Ex. Blue Shirt $8.99 (8.99)(.08) = 0.72 8.99 + 0.72 = $9.71
Total Cost:
Sales Tax and Discount Word Problems
1. Several taxable items are sold at a retail price of $21.50. The sales tax rate is 8%.
What is the total amount of tax and the total amount to be paid?
2. A table was purchased for $70.00 less a 5% trade discount. The sales tax rate was 8%.
How much was paid for the table?
3. Rico Carty lives in a state having a sales tax rate of 8%. Carty crossed the state line
into a state having a sales tax rate of 3% to make a purchase in the amount of $5,743.
Compute the amount Carty saved in sales tax by purchasing in the neighboring state.
4. A customer bought the following items:

1. Milk $2.49
2. Orange Juice $2.89
3. Soap $4.75
The tax rate is 8%. What was the total cost?
5. Alfredo Griffin lives in a state having a sales tax of 6%. Griffin crossed the state line
into a state having a 3% tax rate to make a purchase in the amount of $562. If
transportation to the next state cost Griffin $20, compute the gain/loss by purchasing
in another state.
6. Tony Fernandez planned to purchase furniture costing $29,900. The sales tax in
Fernandez’s home state was 8%. The sales tax in a neighboring state was 3%. Delivery
charge from the neighboring state would be $1,000. Compute the gain/loss by
purchasing furniture from the neighboring state.

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Name: ____________________________________________________ Period: _____

Packet 9: Discounts and Sales Tax

1. Item Amount x Discount Rate = 1. Item Amount x (100% - Discount Rate)

2. Item Amount – Discount Amount = Sale

Benefits of Method Benefits of Method

Original Price Discount Rate Work Space Sale Price

Complement Method Shortcut

Steps to Computing the Equivalent Single Discount Rate

Example: 25%, 20%, 10%

1. Calculate the complement of each rate.

2. Multiply the complement rates and write as a percent.

3. List Price: $1,200 Trade Discounts: 50%, 40%, 10%

4. List Price: $7,400 Trade Discounts: 15%, 10%, 3%

5. List Price: $8,480 Trade Discounts: 25%, 12%, 4%

What is Sales Tax?

What is sales tax?

Where does sales tax go?

What items are taxed?

Taxed Exempt from Taxes

In Niagara County, they add an ________% sales tax.

1. Change the percent to a decimal. _________% = __________

Item Selling Tax Total Cost

4. A customer bought the following items:

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Name: ________________________________________________ Period: _

1. Change the percent to a decimal. _% = __