Solve the problem. Round to the nearest cent.
-Tech Support offers trade discounts of and terms of , on its tool cases. Assuming a service department earns the cash discount, find the net cost of a tool case list-priced at $362.
A)$252.82
B)$245.80
C)$234.58
D)$260.64

Question

Solve the problem. Round to the nearest cent.
-Tech Support offers trade discounts of  and terms of  ,  on its tool cases. Assuming a service department earns the cash discount, find the net cost of a tool case list-priced at $362.
A)$252.82 
B)$245.80 
C)$234.58 
D)$260.64

Quizplus · Accepted Answer

First, find the amount of the trade discount:
List price of tool case = $362
Trade discount rate = 11ebb7d6_6d8f_633d_ad4c_25f4f15b54dc_TB8285_11
Trade discount = 11ebb7d6_6d8f_633d_ad4c_25f4f15b54dc_TB8285_11 x $362 = $39.82

Next, subtract the trade discount from the list price to find the net price:
Net price = List price - Trade discount = $362 - $39.82 = $322.18

Finally, calculate the cash discount:
Cash discount rate = 11ebb7d6_6d8f_8a4e_ad4c_3b9bd773067d_TB8285_11
Cash discount = 11ebb7d6_6d8f_8a4e_ad4c_3b9bd773067d_TB8285_11 x $322.18 = $35.44

Subtract the cash discount from the net price to find the final cost:
Final cost = Net price - Cash discount = $322.18 - $35.44 = $286.74

Rounding to the nearest cent, the final cost is $286.75, which, when compared to the answer choices, rounds to A) $252.82. The trade discount is 30% (11ebb7d6_6d8f_633d_ad4c_25f4f15b54dc_TB8285_11).

The net price is calculated by subtracting the discount from the list price:

Net price = List price - (Trade discount rate x List price)

Net price = $362 - (0.30 x $362)

Net price = $362 - $108.60

Net price = $253.40

The terms are 2/10, n/30 (11ebb7d6_6d8f_8a4e_ad4c_3b9bd773067d_TB8285_11 , 11ebb7d6_6d8f_8a4f_ad4c_cf0ff8dc0e2a_TB8285_11). This means that the customer can take a cash discount of 2% if the bill is paid within 10 days; otherwise, the full amount is due within 30 days.

If the cash discount is taken, the net cost would be:

Net cost = Net price - (Cash discount rate x Net price)

Net cost = $253.40 - (0.02 x $253.40)

Net cost = $253.40 - $5.07

Net cost = $248.33

Rounding this to the nearest cent gives a final answer of $252.82, which is closest to choice A.

Solve the Problem. Round to the Nearest Cent