An amusement park purchased equipment from a manufacturer for a list price of
$42,000, minus trade discounts of 30/20/15. Calculate the amount of the trade discount
on the purchase.
A. $19,992 C. $23,520
B. $22,008 D. $29,400
could someone help me understand how to solve this problem
after the first discount of 30% you will have 70% left to pay, or 42000(.7)
then after another discount of 20% you will have to pay 80% or the above or
42000(.7)(.8)
and finally after another 15% you have to pay 85% of the above or
42000(.7)(.8)(.85) = 19992
I just read the question again.
the answer I left you with would be the final cost, but it asked for the discount
so the discount would be
42000 - 19992 = 22008 or (B)
To calculate the trade discount on the purchase, you need to understand the concept of a trade discount and how it is applied.
The trade discount is a reduction in the list price of a product or service, typically offered by manufacturers to wholesalers or retailers. It is usually expressed as a series of percentages.
In this case, the trade discount is mentioned as 30/20/15. This means that the discount is applied in three stages: 30% first, then 20% on the remaining amount, and finally 15% on the remaining amount.
To calculate the trade discount, you can follow these steps:
Step 1: Start with the list price.
The list price mentioned in the problem is $42,000.
Step 2: Apply the first trade discount of 30%.
To calculate the amount of the first trade discount, multiply the list price by 30%:
$42,000 * 0.30 = $12,600
Step 3: Subtract the first trade discount from the original list price.
$42,000 - $12,600 = $29,400
Step 4: Apply the second trade discount of 20% on the remaining amount.
To calculate the amount of the second trade discount, multiply the remaining amount by 20%:
$29,400 * 0.20 = $5,880
Step 5: Subtract the second trade discount from the remaining amount.
$29,400 - $5,880 = $23,520
Step 6: Apply the third trade discount of 15% on the remaining amount.
To calculate the amount of the third trade discount, multiply the remaining amount by 15%:
$23,520 * 0.15 = $3,528
Step 7: Subtract the third trade discount from the remaining amount.
$23,520 - $3,528 = $19,992
Therefore, the amount of the trade discount on the purchase is $19,992. So, the correct answer is A.