Question

Calculate the trade discount amount of merchandise with a list price of $7,000 less trade discounts of 40/20/15.

Answer 1

The trade discount amount on a $7,000 list price with discounts of 40/20/15 is calculated in a step-by-step manner, resulting in a final trade discount of $4,144.

Step-by-step explanation:

To calculate the trade discount amount with a list price of $7,000 and trade discounts of 40/20/15, we follow these steps:

1. Apply the first discount of 40% to the list price: $7,000 x 0.40 = $2,800.
2. Subtract the first discount from the list price: $7,000 - $2,800 = $4,200 remaining.
3. Apply the second discount of 20% to the remaining amount: $4,200 x 0.20 = $840.
4. Subtract the second discount from the remaining amount: $4,200 - $840 = $3,360 remaining.
5. Apply the third discount of 15% to the remaining amount: $3,360 x 0.15 = $504.
6. Subtract the third discount from the remaining amount to find the final price: $3,360 - $504 = $2,856.
7. To find the total discount amount, subtract the final price from the original list price: $7,000 - $2,856 = $4,144.

Therefore, the trade discount amount is $4,144.

Answer 2

Answers and Step-by-step explanation:

Trade Discount = List prices x Trade discount rate,

For 40% Trade discount rate,

TRADE DISCOUNT =

7000 x 40% = $2,800

For 20% Trade discount rate,

Net amount = 7000 - 2800 = 4200

TRADE DISCOUNT =

4200 x 20% = $840

For 15% Trade discount rate,

Net amount = 4200 - 840 = 3360

TRADE DISCOUNT =

3360 x 15% = $504

Therefore, the Trade Discount amounts are: $2,800, $840 and $504 for 40/20/15 rates respectively.