Dents and Dings Auto Body buys paint with a list price of $29,000. If the supplier extends trade discounts of 30/35/20, what is the trade discount amount?
$10,556
The answer is 18,444
To calculate the trade discount amount, we need to understand what the numbers in the trade discount terms represent.
In this case, the trade discounts are given as 30/35/20. These three numbers indicate a series of discounts applied successively.
The first number (30) represents the initial discount percentage, which is 30%. This means that Dents and Dings Auto Body gets a 30% discount off the list price.
The second number (35) represents a second discount percentage based on the discounted price after the first discount. In other words, the trade discount is applied to the remaining amount after deducting the first discount. So, after the first discount of 30%, only 70% of the original list price remains. The second discount of 35% is then applied to this remaining amount.
The third number (20) represents a final discount percentage based on the discounted price after the second discount. Similar to the second discount, the trade discount is applied to the remaining amount after the second discount.
To find the trade discount, we can follow these steps:
Step 1: Calculate the discounted price after the first discount:
Discounted price after the first discount = List Price - (List Price * (30/100))
Step 2: Calculate the discounted price after the second discount:
Discounted price after the second discount = Remaining Amount - (Remaining Amount * (35/100))
Step 3: Calculate the trade discount amount:
Trade Discount Amount = List Price - Discounted price after the second discount
Let's calculate the trade discount amount for Dents and Dings Auto Body:
Step 1: Discounted price after the first discount:
Discounted price after the first discount = $29,000 - ($29,000 * (30/100))
= $29,000 - ($29,000 * 0.3)
= $29,000 - $8,700
= $20,300
Step 2: Discounted price after the second discount:
Discounted price after the second discount = $20,300 - ($20,300 * (35/100))
= $20,300 - ($20,300 * 0.35)
= $20,300 - $7,105
= $13,195
Step 3: Trade Discount Amount:
Trade Discount Amount = $29,000 - $13,195
= $15,805
Therefore, the trade discount amount for Dents and Dings Auto Body is $15,805.
Which discount are they getting?
Multiply $29,000 by either .3, .35 or .2 and subtract that mount from $29,000.