Fantasia Florist Shop purchases an order of imported roses with a list price of $2,375 less trade discounts of 15/20/20. What is the dollar amount of the trade discount?
15/20/20 is a successive discount of 15%, followed by 20% on the discounted price, and finally another 20% of the doubly discounted price.
For example, $1000 with a trade discount of 15/20/30 would have a final discounted price of
$1000*(1-0.15)(1-0.20)(1-0.30)=$476
So the trade discount is
$1000-$476=$524.
$1,292.00
To determine the dollar amount of the trade discount, we need to calculate the trade discount rate for each discount and then apply them one by one.
Let's calculate the first discount of 15%:
15% of $2,375 = 0.15 * $2,375 = $356.25
Now, we subtract the first discount from the list price:
$2,375 - $356.25 = $2,018.75
Next, let's calculate the second discount of 20%:
20% of $2,018.75 = 0.20 * $2,018.75 = $403.75
Again, we subtract the second discount from the previous total:
$2,018.75 - $403.75 = $1,615
Finally, let's calculate the third discount of 20%:
20% of $1,615 = 0.20 * $1,615 = $323
The total dollar amount of the trade discount is $323.
To determine the dollar amount of the trade discount, we first need to calculate the trade discount rate.
A trade discount is typically expressed as a series of percentages that are subtracted from the list price, one after another. In this case, the trade discount is given as 15/20/20.
To calculate the trade discount rate, we need to add the percentages and subtract the sum from 100%. Let's do the calculation:
Trade discount rate = 100% - (15% + 20% + 20%)
= 100% - 55%
= 45%
Now that we have the trade discount rate, we can calculate the dollar amount of the trade discount.
Dollar amount of the trade discount = Trade discount rate * List price
Given that the list price is $2,375, we can calculate the dollar amount of the trade discount:
Dollar amount of the trade discount = 45% * $2,375
= 0.45 * $2,375
= $1,068.75
Therefore, the dollar amount of the trade discount in this case is $1,068.75.