Anselmo's Engineering buys circuit boards with a list price of $32,000. If the supplier extends trade discounts of 42/32/12, what is the trade discount amount?

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Quizplus · Accepted Answer

The trade discount amount is calculated by first finding the net price factor, which is 1 minus each of the trade discounts applied successively. The trade discounts are 42%, 32%, and 12%. So, the net price factor is 1 - 0.42 = 0.58, then 0.58 * (1 - 0.32) = 0.3944, and finally 0.3944 * (1 - 0.12) = 0.347072. The trade discount amount is then the list price multiplied by (1 - net price factor), which is $32,000 * (1 - 0.347072) = $20,893.70.

Anselmo's Engineering Buys Circuit Boards with a List Price of $32,000