Fantasia Florist Shop purchases an order of roses with a list price of $2,375 less trade discounts of 15/20/20. What is the amount of trade discount and what is the net dollar amount of that rose order?
Trade discount: .85*.80*.80=.544
2375*.544=1292
Answer is $1292.00
Net dollar amount: 2375-1292=1083.00
To calculate the trade discount, you need to apply the three trade discounts of 15/20/20 to the list price.
The first trade discount of 15% can be calculated by subtracting 15% from 100% to get 85%. This means the shop pays 85% of the list price after the first trade discount.
The second trade discount of 20% can be calculated by subtracting 20% from 100% to get 80%. This means the shop pays 80% of the price after the first trade discount.
The third trade discount of 20% can also be calculated by subtracting 20% from 100% to get 80%. This means the shop pays 80% of the price after the second trade discount.
To find the total trade discount, you multiply the trade discount percentages together: 0.85 * 0.80 * 0.80 = 0.544.
Next, to calculate the amount of the trade discount, multiply the total trade discount by the list price: $2,375 * 0.544 = $1,292.
Therefore, the amount of the trade discount is $1,292.
To find the net dollar amount of the rose order, subtract the trade discount amount from the list price: $2,375 - $1,292 = $1,083.
Therefore, the net dollar amount of the rose order is $1,083.