A trade discount, or discount, is a percentage reduction to the retailer by a manufacturer or wholesaler. It is most often expressed as a percent decrease applied to a list price (LP), or suggested retail price. The discount is subtracted from the list price to provide the net price (NP), the price the retailer actually pays for the particular item. The net price is the desired result when the list price and discount rate are given. The net price, NP, results from the rate of decrease (discount rate) being applied to the list price, LP. So, NP corresponds to a decreased base, BD, is the discount process. Recall, that two mathematical formulas have been developed for the decrease process. Each is given using previous notation as well as notation using LP, D, and NP. BD = B - RD* B BD = B(1-RD) NP = LP - D(%)*LP NP = LP(1 - D(%)) D (%) means D as a percent Both formulas are illustrated in the following example. Example 1.   LP = $200,  find NP. D(%) = 25% NP = LP - D(%) * LP NP = LP(1-RD) NP = 200 - .25 * 200 NP = 200 - 50 NP = 150 NP = 200 *.75 NP = 150 Observe that D($), D as a dollar amount is $50 and that LP = NP + D and LP(%) = NP(%) + D(%) $200 = $150 + $50 100% = 75% + 25% Top A more convenient method, and perhaps superior method, of solution to this problem is illustrated below. A chart, or table, is utilized to organize the pertinent information and provide a framework for the solution. Example 2: Find D($) , NP(%), and NP($) for an item with a LP of $200 and D(%) of 25%.   % (As Decimal) $   D .25 .25 *200 = 50 Add Down  These two in both % as decimal and dollar amounts add to these amounts NP .75 .75 * 200 = 150 LP 1 200 D(%) and NP(%) are complements of one another. LP(%) = 100% since D($) + NP($) = LP($) and LP(%) = D(%) + NP(%). 100% as a decimal is 1.00 or 1. Example 3: Find NP($) when LP($) = $200 and D(%) = %. Note: % suggests to use Page 48 for the conversion of the percent to a fraction. This is illustrated below using the tabular format as demonstrated in the previous example.   % Fraction (Page 48) $ D * 200 = 16.67 NP * 200 = 183.33 LP 1 200 NP (Fraction) is obtained using the complement since 1 - = .  No need to complete the % column. The D($) is given for clarity.

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