1.

Trade discount

EXAMPLE 1: There is an ongoing 3-day sale in SM Department store. Chanel is going to buy a
shirt worth P500 with a 20% discount. What is the trade discount?

Given: Original Price – P500

Rate of Discount – 20% or 0.2
Trade Discount - ?
Formula: Trade Discount(TD) = Original Price(OP) x Rate of Discount(R)
Solution: P500 x 20% = P100
Answer: The trade discount is P100
Explanation: This problem shows trade discount because it involves solving for the trade
discount of an item with a certain rate of discount.
EXAMPLE 2: Chanel’s grandfather, is a senior citizen, and he needs to buy a medicine for high
blood pressure so he asked Chanel to buy it for him in Mercury Drug. He tells Chanel to bring his
Senior Citizen ID so he can avail of the 20% discount for Senior citizens. The medicine costs
P1000, how much will Chanel pay?
Given: Rate of Discount – 20%
Original Price – P1000
Trade Discount and Net Price - ?
Formula: Trade Discount = OP x R
Net Price(NP) = OP – TD
Solution: P1000 x 20% = 200