Screws and Bolts Outlet buys a shipment of screws with a list price of $2,400. If the supplier extends trade discounts of 20/25/10, what is the trade discount amount?

Question

Quizplus · Accepted Answer

The trade discount amount is calculated by first applying each discount in sequence to the list price. The discounts are 20%, 25%, and 10%. First, apply the 20% discount: $2,400 - ($2,400 * 20%) = $2,400 - $480 = $1,920. Then, apply the 25% discount to the result: $1,920 - ($1,920 * 25%) = $1,920 - $480 = $1,440. Finally, apply the 10% discount: $1,440 - ($1,440 * 10%) = $1,440 - $144 = $1,296. The total trade discount amount is the original price minus the final price: $2,400 - $1,296 = $1,104.

Screws and Bolts Outlet Buys a Shipment of Screws with a List