Business Mathematics - Buying and Selling

Module 7 – Single Trade Discount

Objectives:
At the end of this module you will be able to:
1. Understand the flow of supply chain
2. Define single trade discount
3. Illustrate how to compute single trade discounts.
Motivation (Answer the question below)
Situation: Let say you own a retail store that sells branded rubber shoes.
Question: Do you have any idea about the process how the shoes go through before it reached your store?
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Lesson Proper – Single Trade Discount
A supply chain is a network between a company and its suppliers to produce and distribute a specific
product or service.
The entities in the supply chain include producers, vendors, warehouses, transportation companies,
distribution centers, and retailers.

Supply Chain

Manufacturer

Distributor Consumer

Wholesaler Retailer

Diagram of Supply Chain

Trade Discount
▪ List price reductions that a business may offer to its business customers.
▪ Typically offered between manufacturer and wholesaler or between wholesaler and retailer.
▪ Usually occur when a purchaser meets certain condition to qualify, and it is a reduction in cost from
the normal retail price on goods.
Rea life Scenario of Trade Discount
A certain distributor of a branded rubber shoes provides a 15% discount to its wholesaler who
purchased 1500 pieces of rubber shoes in a month. Instead of paying Php 4,500, 000, the wholesaler will just
pay Php 3, 825, 000 because of the given discount.
 Business Mathematics - Buying and Selling

In this Scenario the 15% is what we called Trade Discount Rate. The 4, 500, 000 is the List Price. And the
3, 825, 000 is the Net Price.

Definition of the terms

Trade Discount Rate – is the percentage of the discount.
List Price – it is the price of the product without discounts.
Net Price – It is an actual price a customer pays after deducting any trade discounts.

Computations for Trade Discount

In solving the trade discount, we have two methods to use.
1. Discount Method – it is useful to find the net price and actual amount of trade discount.

Step 1: 𝑫𝒊𝒔𝒄𝒐𝒖𝒏𝒕 = 𝑳𝒊𝒔𝒕 𝑷𝒓𝒊𝒄𝒆 × 𝑻𝒓𝒂𝒅𝒆 𝑫𝒊𝒔𝒄𝒐𝒖𝒏𝒕 𝑹𝒂𝒕𝒆

Step 2: 𝑵𝒆𝒕 𝑷𝒓𝒊𝒄𝒆 = 𝑳𝒊𝒔𝒕 𝑷𝒓𝒊𝒄𝒆 – 𝑫𝒊𝒔𝒄𝒐𝒖𝒏𝒕

2. Complement Method – it is useful to find the net price.

Step 1: 𝑪𝒐𝒎𝒑𝒍𝒆𝒎𝒆𝒏𝒕 𝑹𝒂𝒕𝒆 = 𝟏𝟎𝟎% − 𝑻𝒓𝒂𝒅𝒆 𝑫𝒊𝒔𝒄𝒐𝒖𝒏𝒕 𝑹𝒂𝒕𝒆

Step 2: 𝑵𝒆𝒕 𝑷𝒓𝒊𝒄𝒆 = 𝑳𝒊𝒔𝒕 𝑷𝒓𝒊𝒄𝒆 × 𝑪𝒐𝒎𝒑𝒍𝒆𝒎𝒆𝒏𝒕 𝑹𝒂𝒕𝒆.

Finding the Net Price.

Example 1: Find the net price of shirt listed at Php 925. The retailer is granted a 20% trade discount.
Solution 1: solve using the discount method.
Given:
List Price = 925
Trade discount rate = 20% or 0.20

To find the trade discount we are going to use the formula 𝑫𝒊𝒔𝒄𝒐𝒖𝒏𝒕 = 𝑳𝒊𝒔𝒕 𝑷𝒓𝒊𝒄𝒆 ×
𝑻𝒓𝒂𝒅𝒆 𝑫𝒊𝒔𝒄𝒐𝒖𝒏𝒕 𝑹𝒂𝒕𝒆
Discount = (925)(0.20)
Discount = 185

Because we have our discount value then we are going to proceed on finding the net price.
Using the formula: 𝑵𝒆𝒕 𝑷𝒓𝒊𝒄𝒆 = 𝑳𝒊𝒔𝒕 𝑷𝒓𝒊𝒄𝒆 – 𝑫𝒊𝒔𝒄𝒐𝒖𝒏𝒕

Net price = 925 − 185

Net price = Php. 740

 Business Mathematics - Buying and Selling

Solution 2: solve using the complement method.

Given:
List Price = 925
Trade discount rate = 20% or 0.20

To find the complement discount rate we just simply subtract the 20% to 100%.
CDR = 100-20
CDR = 80% or 0.80

Because we have our complement discount rate, then we are going to proceed on finding the net price.
Using the formula: 𝑵𝒆𝒕 𝑷𝒓𝒊𝒄𝒆 = 𝑳𝒊𝒔𝒕 𝑷𝒓𝒊𝒄𝒆 × 𝑪𝒐𝒎𝒑𝒍𝒆𝒎𝒆𝒏𝒕 𝑫𝒊𝒔𝒄𝒐𝒖𝒏𝒕 𝑹𝒂𝒕𝒆

Net price = 925 × 0.80

Net price = Php. 740

Finding the List Price.

Example 2: A manufacturer can cover its cost and make a reasonable profit if it sells its product for Php 350.
At what price should the product be listed so that a discount of 35% can be allowed?

Solution: Solve using the complement method.

Given:
Net price = 350
Trade Discount Rate = 35% or 0.35

Complement rate = 100 – 35

Complement = 65% or 0.65

By using this formula: 𝑵𝒆𝒕 𝑷𝒓𝒊𝒄𝒆 = 𝑳𝒊𝒔𝒕 𝑷𝒓𝒊𝒄𝒆 × 𝑪𝒐𝒎𝒑𝒍𝒆𝒎𝒆𝒏𝒕 𝑹𝒂𝒕𝒆. lets substitute our given values
in the formula.

350 = 𝐿𝑃 × 0.65

350 0.65𝐿𝑃
=
0.65 0.65

𝑳𝒊𝒔𝒕 𝑷𝒓𝒊𝒄𝒆 = 𝑷𝒉𝒑. 𝟓𝟑𝟖. 𝟒𝟔

The product is listed at Php 538. 46.

 Business Mathematics - Buying and Selling
Finding the Discount Rate.

Example 3: A dining table is listed in a wholesaler’s catalog at Php 4, 210. The dining table is sold to a
retailer for a net price of Php 3,800. What trade discount rate was given?

Solution:
Given:
List Price = 4,210
Net Price = 3,800

Step 1: Using the formula 𝑵𝑷 = 𝑳𝑷 − 𝑻𝑫 look first the Trade Discount. Substitute the given values in the
formula.

𝟑𝟖𝟎𝟎 = 𝟒𝟐𝟏𝟎 − 𝑻𝑫
𝟒𝟐𝟏𝟎 − 𝟑𝟖𝟎𝟎 = 𝑻𝑫
𝑻𝑫 = 𝟒𝟏𝟎

Step 2: Using the formula 𝑻𝑫 = 𝑳𝑷 × 𝑻𝑫𝑹, Substitute all the given values in the formula.

𝟒𝟏𝟎 = (𝟒𝟐𝟏𝟎)(𝑻𝑫𝑹)

𝟒𝟏𝟎 𝟒𝟐𝟏𝟎𝑻𝑫𝑹
=
𝟒𝟐𝟏𝟎 𝟒𝟐𝟏𝟎

𝑻𝑫𝑹 = 𝟎. 𝟎𝟗𝟕𝟒 𝒐𝒓 𝟗. 𝟕𝟒%

The trade discount rate of a dining table is 9.74%.

Key to Remember

Trade Discount – refers to the list price reductions that a business may offer to its business customers.

In solving the trade discount, we have two methods to use.

1. Discount Method – it is useful to find the net price and actual amount of trade discount.

Step 1: 𝑫𝒊𝒔𝒄𝒐𝒖𝒏𝒕 = 𝑳𝒊𝒔𝒕 𝑷𝒓𝒊𝒄𝒆 × 𝑻𝒓𝒂𝒅𝒆 𝑫𝒊𝒔𝒄𝒐𝒖𝒏𝒕 𝑹𝒂𝒕𝒆

Step 2: 𝑵𝒆𝒕 𝑷𝒓𝒊𝒄𝒆 = 𝑳𝒊𝒔𝒕 𝑷𝒓𝒊𝒄𝒆 – 𝑫𝒊𝒔𝒄𝒐𝒖𝒏𝒕

2. Complement Method – it is useful to find the net price.

Step 1: 𝑪𝒐𝒎𝒑𝒍𝒆𝒎𝒆𝒏𝒕 𝑹𝒂𝒕𝒆 = 𝟏𝟎𝟎% − 𝑻𝒓𝒂𝒅𝒆 𝑫𝒊𝒔𝒄𝒐𝒖𝒏𝒕 𝑹𝒂𝒕𝒆

Step 2: 𝑵𝒆𝒕 𝑷𝒓𝒊𝒄𝒆 = 𝑳𝒊𝒔𝒕 𝑷𝒓𝒊𝒄𝒆 × 𝑪𝒐𝒎𝒑𝒍𝒆𝒎𝒆𝒏𝒕 𝑹𝒂𝒕𝒆.

References:
• Elenzano, M., et. al. (2018). Math Today’s Work Business Mathematics. Quezon City: Pheonix Publishing House.
• Lim, Y., et. al. (2016) Math Engaged Learning Business Mathematics. Quezon City: SIBS Publishing House.
• Mariano, N., (2016). Business Mathematics. Manila: Rex Bookstore, Inc.
• https://www.youtube.com/watch?v=DUmBpPmOA3E&t=635s
 Business Mathematics - Buying and Selling

Activity Sheet #7
Single Trade Discount
Name: ____________________________ Year & Section: __________________________
School Branch: _____________________ Date: ___________________________________

Direction: Solve the following and complete the table below. Write your solution below.
A.
List price (LP) Trade Discount Rate Trade Discount (TD) Net Price (NP)
(TDR)
25, 600 12%
7, 250 675

B.
A 17.5% discount on a headphone amounts to Php 560. What is the list Price?
 Business Mathematics - Buying and Selling
Module 8 – Discount Series
Objectives:
At the end of this module you will be able to:
1. Define discount series,
2. Illustrate how to compute discount series.

Motivation (Real life scenario)

A whole grants additional discount other than the discount he has given to his customer. Aside from
the regular 10% discount, the wholesaler grants a special additional discount of 5% to the customer who
made cash payment.

In this example the discount series is the 10% and the 5%.

Lesson Proper – Discount Series

Discount Series
• A discount provided that has two or more discounts based on a combination of conditions.
• Commonly provided to a product based on the conditions that must be satisfied for the discount to be
applied.

Computations for Discount Series

To solve for the Net Price
Multiply the list price by all the complement rates successively.
𝑵𝑷 = 𝑳𝑷 × 𝑪𝑹𝟏 × 𝑪𝑹𝟐 × 𝑪𝑹𝟑 . ..
Where;
NP = Net Price
LP = List Price
CR = Complement Rate

Finding the Total Discount and Net Price.

Example 1: The list price of a winter coat is Php 3,500. A discount series of 20%, 15%, and 5% is being
offered for any orders above Php 100,000. Find the total discount price and the net price of an order of 30
coats.

Solution:
Given:
List Price = 3,500 multiplied to 30 coats it gives us the product of 105, 000
Discount Series = 20%, 15%, 5%
Complement Rate = Subtract the discount series to 100% it gives the result of 80%, 85%, 95%.
 Business Mathematics - Buying and Selling

a.) Solve for the Net Price using the formula 𝑵𝑷 = 𝑳𝑷 × 𝑪𝑹𝟏 × 𝑪𝑹𝟐 × 𝑪𝑹𝟑 . ..

𝑵𝑷 = 𝟏𝟎𝟓, 𝟎𝟎𝟎 × 𝟎. 𝟖𝟎 × 𝟎. 𝟖𝟓 × 𝟎. 𝟗𝟓
𝑵𝑷 = 𝑷𝒉𝒑 𝟔𝟕, 𝟖𝟑𝟎
The net price of 30 coats is Php 67, 830.
b.) The total discount
𝟏𝟎𝟓, 𝟎𝟎𝟎 − 𝟔𝟕, 𝟖𝟑𝟎 = 𝟑𝟕, 𝟏𝟕𝟎
The total discount is Php 37, 170.

Finding the List Price

Example 2: A retail shop sold bags at a net price of Php 799.99 each, after putting discount series of 20%
and 10%. Find the list price.
Solution:
Given:
NP = 799.99
Discount Series = 20%, 10%
Complement Rates = 80%, 90%

Using the formula of finding net price, substitute the given values.

𝐍𝐏 = 𝐋𝐏 × 𝐂𝐑 𝟏 × 𝐂𝐑 𝟐 × 𝐂𝐑 𝟑 …

𝟕𝟗𝟗. 𝟗𝟗 = (𝑳𝑷)(𝟎. 𝟖𝟎)(𝟎. 𝟗𝟎)

𝟕𝟗𝟗. 𝟗𝟗
𝑳𝑷 =
(𝟎. 𝟖𝟎)(𝟎. 𝟗𝟎)

𝑳𝑷 = 𝟏, 𝟏𝟏𝟏. 𝟏𝟎

The list price is Php 1,111.10.

Finding the Trade Discount Rate

Example 3: A pair of shoes with a tag price of Php 2, 580 was bought at a net price of Php 2, 010 with a
1
first discount of 5 %. What was the second discount rate?
2

Solution:
Given:
List Price = 2, 580
Net Price = 2, 010
1
First Discount Rate = 52%
Complement rate = 94.5%
 Business Mathematics - Buying and Selling

Using the formula 𝐍𝐏 = 𝐋𝐏 × 𝐂𝐑 𝟏 × 𝐂𝐑 𝟐 × 𝐂𝐑 𝟑 … Substitute the given values in the formula.

𝟐𝟎𝟏𝟎 = 𝟐𝟓𝟖𝟎 × 𝟎. 𝟗𝟒𝟓 × 𝑪𝑹𝟐

𝟐𝟎𝟏𝟎 = 𝟐𝟒𝟑𝟖. 𝟏𝑪𝑹𝟐

𝟐𝟎𝟏𝟎 𝟐𝟒𝟑𝟖. 𝟏𝑪𝑹𝟐

=
𝟐𝟒𝟑𝟖. 𝟏 𝟐𝟒𝟑𝟖. 𝟏

𝟎. 𝟖𝟐𝟒𝟒 = 𝑪𝑹𝟐

To find the second discount rate = 1 – 0.8244

Second discount rate = 0.1756
Second discount rate = 17.56%

The second discount rate is 17.56%.

Key to Remember
Discount Series
• A discount provided that has two or more discounts based on a combination of conditions.
• Commonly provided to a product based on the conditions that must be satisfied for the discount to be
applied.
Computations for Discount Series
To solve for the Net Price
Multiply the list price by all the complement rates successively.
𝑵𝑷 = 𝑳𝑷 × 𝑪𝑹𝟏 × 𝑪𝑹𝟐 × 𝑪𝑹𝟑 . ..
Where;
NP = Net Price
LP = List Price
CR = Complement Rate

References:
• Elenzano, M., et. al. (2018). Math Today’s Work Business Mathematics. Quezon City: Pheonix Publishing House.
• Lim, Y., et. al. (2016) Math Engaged Learning Business Mathematics. Quezon City: SIBS Publishing House.
• Mariano, N., (2016). Business Mathematics. Manila: Rex Bookstore,
• https://www.youtube.com/watch?v=dW0rCtkNFDI
 Business Mathematics - Buying and Selling

Activity Sheet #8
Discount Series
Name: ____________________________ Year & Section: __________________________
School Branch: _____________________ Date: ___________________________________

Direction: Solve the following completely. Write your solution below.

1. A denim pants is listed for 1, 293.44 less 18%, 9% and 3%. What is the net price?
2. A retail shop sold charger at a net price of Php 150 each, after putting discount series of 10% and
5%. Find the list price.
3. A pair of pajamas with a tag price of Php 349 was bought at a net price of Php 400 with a first
discount of 2 %. What was the second discount rate?