Tan's Bakery buys some goods with a list price of $5,900. The supplier extends a 45% trade discount rate. What is the trade discount?
5900 - (5900 * 0.45) = ________
$2,655?
No.
To calculate the trade discount, we need to first determine the percentage amount of the list price that is being discounted. In this case, the trade discount rate is 45%.
Step 1: Convert the trade discount rate to a decimal by dividing it by 100:
45% ÷ 100 = 0.45
Step 2: Calculate the trade discount amount by multiplying the list price by the trade discount rate:
Discount = List Price × Trade Discount Rate
Discount = $5,900 × 0.45
Discount = $2,655
Therefore, the trade discount is $2,655.