Find the trade discount for an order of merchandise with a list price of $8,000 less trade discount rates of 30/20/15. (Find the single equivalent discount first.)
To find the trade discount for the order of merchandise, we need to calculate the single equivalent discount first. The single equivalent discount is the total discount obtained by combining multiple discounts.
Let's calculate the single equivalent discount using the trade discount rates of 30/20/15.
Step 1: Convert each trade discount rate to a decimal by dividing it by 100.
Trade discount rate of 30% = 30/100 = 0.30
Trade discount rate of 20% = 20/100 = 0.20
Trade discount rate of 15% = 15/100 = 0.15
Step 2: Calculate the net price after the first discount.
Net Price = List Price - (List Price * Trade Discount Rate of 30%)
Net Price = $8,000 - ($8,000 * 0.30)
Net Price = $8,000 - $2,400
Net Price = $5,600
Step 3: Calculate the net price after the second discount.
Net Price = Net Price - (Net Price * Trade Discount Rate of 20%)
Net Price = $5,600 - ($5,600 * 0.20)
Net Price = $5,600 - $1,120
Net Price = $4,480
Step 4: Calculate the net price after the third discount.
Net Price = Net Price - (Net Price * Trade Discount Rate of 15%)
Net Price = $4,480 - ($4,480 * 0.15)
Net Price = $4,480 - $672
Net Price = $3,808
The single equivalent discount is the difference between the list price and the net price after all discounts.
Single Equivalent Discount = List Price - Net Price
Single Equivalent Discount = $8,000 - $3,808
Single Equivalent Discount = $4,192
Therefore, the trade discount for the order of merchandise is $4,192.