How to Compute Trade Discount
Introduction
The list price, or catalog price of an item, is the price for which an item is sold.
An item is purchased at a trade discount, which is a discount off the list price.
The trade discount rate is the amount of the discount expressed as a percentage.
The net price is the price that is paid for the item.
Example
Zoho Appliances is purchasing a freezer engine for a super freezer. The list price of the engine is
$399. Zoho Appliances receives a 25 percent trade discount from the wholesaler. What is the net price
of the engine?
The answer is as follows:
- Find the trade discount. Trade Discount = List Price × Trade-Discount Rate = $399 × 25% = $99.75
- Find the net price. Net Price = List Price − Trade Discount = $399 - $99.75 = $299.25
Practice: Find the trade discount and list of price of the below examples.
Trade Discount and Net Price
| List Price |
Trade Discount Price |
Trade Discount |
List Price |
| $350.00 |
25% |
??? |
??? |
| $450.00 |
20% |
??? |
??? |
| $650.00 |
20% |
??? |
??? |
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