Final answer:
The rate of discount is calculated by dividing the discount amount by the marked price and then multiplying by 100. This formula gives the discount rate as a percentage of the original price.
Step-by-step explanation:
The rate of discount is a financial term that refers to the percentage by which the original price of an item is reduced. The formula to calculate the rate of discount when you have the discount amount and the marked price is:
- First, divide the discount amount by the marked price.
- Then, multiply the result by 100 to get the rate of discount as a percentage.
To put it into a formula, if 'D' is the discount amount and 'MP' is the marked price, then:
Rate of Discount (%) = (D / MP) × 100
For example, if an item is marked at $50 and you are given a discount of $10, the rate of discount would be calculated as follows:
Rate of Discount (%) = ($10 / $50) × 100
= 0.2 × 100
= 20%
So, the rate of discount is 20%.