All-Ways Green Gardens buys plants with a list price of $15,000. If the supplier extends trade discounts of 20/15/1, what is the trade discount amount?

Question

Quizplus · Accepted Answer

The trade discount amount is calculated by first applying each discount in sequence on the list price. The initial price is $15,000. The first discount is 20%, which reduces the price by $3,000 (20% of $15,000), making it $12,000. The second discount is 15%, which reduces this amount by $1,800 (15% of $12,000), making it $10,200. The final discount is 1%, which reduces this amount by $102 (1% of $10,200), making it $10,098. The total discount is the original price minus the final price: $15,000 - $10,098 = $4,902.

All-Ways Green Gardens Buys Plants with a List Price of $15,000