A $200 e-reader is sold in bulk to your store for $186. Calculate the trade discount rate.
Answer (2)
Calculate the discount amount: Discount = List Price − Bulk Price = $200 − $186 = $14 .
Calculate the trade discount rate: Rate = ( List Price Discount ) × 100 .
Substitute the values: Rate = ( $200 $14 ) × 100 .
The trade discount rate is: 7% .
Explanation
Understanding the Problem We are given that the list price of an e-reader is $200 and the bulk price is $186 . We need to find the trade discount rate.
Calculating the Discount Amount First, we need to calculate the trade discount amount, which is the difference between the list price and the bulk price.
Determining the Discount The trade discount amount is: D = List Price − Bulk Price = $200 − $186 = $14
Calculating the Discount Rate Next, we calculate the trade discount rate by dividing the discount amount by the list price and multiplying by 100 to express it as a percentage.
Finding the Rate The trade discount rate is: R = List Price Discount Amount × 100 = $200 $14 × 100 = 7%
Final Answer Therefore, the trade discount rate is 7% .
Examples
Imagine you are buying books for your bookstore. The list price of each book is $25 , but you get them for $22 each when you buy in bulk. Calculating the trade discount rate helps you understand how much you are saving on each book, which is essential for managing your store's finances and pricing your products competitively. This calculation ensures you can accurately assess your profit margins and make informed business decisions. In this case, the trade discount rate would be ( 25 25 − 22 ) × 100 = 12% .
The trade discount rate for the e-reader priced at $200 and sold in bulk for $186 is calculated to be 7%. This is determined by finding the discount amount and dividing it by the list price, then multiplying by 100 to express it as a percentage. Thus, the final trade discount rate is 7%.
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