DISCOUNTS
Sometimes any shop keepers, organization, or merchandise to create more sales, at the time of festivals or for the purpose of old stock clearance. We say that things are being sold at a discount.
Marked Price –
The marked price (MP) or listed price of an article is the price printed on the article itself or on the packaging or a slip attached to the article. In general, the dealer sales articles or goods to the buyer at this price.
Discounts –
When a dealer sells an article for a price that is lower than the marked price or printed price, the difference between the marked price (MP) or printed price and the selling price (SP) is called a discount.
Discount = Marked Price (MP) – Sell Price (SP),
Or, Sell Price (SP) = Marked Price (MP) – Discounts,
Or, Marked Price (MP) = Discounts + Sell Price (SP)
Discount may be offered as a sum of money or a percentage of the marked price (MP), if a dealer allows a discount of a% on the marked price (MP) or printed price.
a
SP = MP – Discount = MP – a% of MP = MP - --------- X MP
100
a
So, SP = ( 1 - --------- ) X MP
100
Sometimes a dealer allows a discount of a1% on the marked or printed price and then a2% on the reduced price. We say that successive discounts of a1% and a2% are available and the selling price (SP) is calculated by the following formula –
a1 a2
SP = ( 1 - ---------- ) ( 1 - ---------- ) X MP
100 100