Question

Find the selling price if the list price is $400 and the trade discount is as follows.

1. 40%
2. 20%
3. 25%
4. 33⅓%
5. 37.3%
6. 16.23%
7. 50%

a) $300
b) $320
c) $340
d) $360

Answer 1

After applying trade discounts to the $400 list price, the closest selling price to the given options is $320, which occurs with a 20% discount. This corresponds to option (b) in the question.

Step-by-step explanation:

To find the selling price after applying a trade discount, you subtract the discount amount from the list price. The discount amount can be found by multiplying the list price by the discount rate (converted to a decimal). For example, a 40% discount on a $400 item would be calculated as follows:

• List Price = $400
• Discount rate = 40% = 0.40 (as a decimal)
• Discount amount = List Price x Discount rate = $400 x 0.40 = $160
• Selling Price = List Price - Discount amount = $400 - $160 = $240

Applying this calculation to the discounts provided, we find:

• For a 20% discount: Selling Price = $400 - ($400 x 0.20) = $320
• For a 25% discount: Selling Price = $400 - ($400 x 0.25) = $300
• For a 33⅛% discount: Selling Price = $400 - ($400 x 0.3333) ≈ $266.67 (approximated)
• For a 37.5% discount: Selling Price = $400 - ($400 x 0.375) = $250
• For a 16.23% discount: Selling Price = $400 - ($400 x 0.1623) ≈ $334.92 (approximated)
• For a 50% discount: Selling Price = $400 - ($400 x 0.50) = $200

The options given in the question (a) $300, (b) $320, (c) $340, (d) $360 do not directly correspond to the calculated selling price after every single discount. However, the selling price after a 20% discount is $320, which relates to option (b).