Page 119 - CalcBus_Flipbook

CH 13] Calculating Business 13-5

Solution algorithm 2: compliments expressed as decimal
$12,000.00 list price
x 0.85 (= 100% — 15%) 15% discount compliment is (1 —.15 =) .85
$10,200.00 balance
x 0.90 (= 100% — 10%) 10% discount compliment is (1 —.10 =) .90
$9,180.00 balance
x 0.90 (= 100% — 10%) 10% discount compliment is (1 —.10 =) .90
$8,262.00 net price

With your hand held calculator and using the % key:

Solution:

Cl/C 12000 X 85 % X 90 % X 90 % —> 8262, means $8,262

Without % key (You must know the decimal value):

Cl/C 12000 X .85 X .90 X .90 = 8262, means $8,262

Example B: Calculate the net price of merchandise listed at $800 less a volume discount
of 15%, duty discount of 10%, cash discount of 5% where each discount
percent is a multiple of the previous discounted value. This is also known as
a series of discounts dependent on how they are applied by the wholesaler.
13
Solution algorithm:

List price x ∫D1-n = net price ∫: An integral. A
function of an integral
$800 list price (or invoice price) x ( ∫ 15%, 10%, 5%) = or denoted by an
integer, especially as
$800 list price (discounts as decimals) x (1.00 − 0.15) x (1.00 − 0.10) x (1.00 - 0.05) =
coefficients of a
Using discount compliment decimals $800 x (0.85) x (0.9) x (0.95) = function.
$800 x 0.72675 = $581.40

Net Price Equivalent Rate (NPER)

With your hand held calculator and using the % key:

Cl/C 800 X 85 % X 90 % X 95 % —> 581.40, means $581.40

Without % key (You must know the decimal value):

Cl/C 800 X .85 X .90 X .95 = 581.40, means $581.40

$800 x (0.85) x (0.9) x (0.95) =

Single Equivalent Discount Rates. Presume there are several different items each having
different list prices yet enjoy the same series of discount rates. It is possible to calculate a single
discount value that can be applied to all items even though their list prices are different; this is the
basis of the equivalent discount rate. This single equivalent discount rate can be applied to each
different item with a different list price. Note the algorithm below and the equivalent rate of
0.72675.

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