BUYING AND SELLING

Objectives:

1. To understand the basic concepts of Buying and

Selling.
2. To differentiate Markup from Markdown.
3. To illustrate how to compute Trade Discounts.
4. To illustrate how to obtain Profit and avoid loss.
5. To solve problems involving Buying and Selling.
GEAR UP!
Answer the following:
1. What is the decimal form 4. 16% of what number is
of 43% 200?
0.43 1250
2. What is the decimal form
of 128% 5. What is 5% of 48?

1.28 2.4

3. What is 800% of 1225? 6. Eighteen is what percent

9800 of 16? 112.5%
EXPLORING TRADE DISCOUNTS
SINGLE TRADE DISCOUNTS
WHAT IS A TRADE DISCOUNT?

•It is the difference

between the list
price and the net
price.
WHAT IS THE LIST PRICE?
• The price for which retailer
should sell the item.

• The manufacturer’s
recommended price for
which the retailer should sell
the item.

• It is also called as the

Suggested Retail Price (SRP).
WHAT IS THE NET PRICE?

•The amount of
item to be paid by
the retailer to the
manufacturer.
 Single Trade Discount
 represented as a percentage of the list price.
Trade Discount - is the difference between the list price and the net
price.
Formulas;
𝑻𝒅 = 𝑳𝒑 − 𝑵𝒑 𝑻𝒅 = 𝑳𝒑 𝒙 𝑫𝒓

Where; Where;
𝑻𝒅 = Trade discounts 𝑻𝒅 = Trade discounts
𝑳𝒑 = List price 𝑳𝒑 = List price
𝑵𝒑 = Net price 𝑫𝒓 = Discount rate
 Single Trade Discount
 represented as a percentage of the list price.
Net Price – is the amount of item to be paid by the retailer to the
manufacturer.
Formulas;
𝑵𝒑 = 𝑳𝒑 − 𝑻𝒅 𝑵 𝒑 = 𝑳𝒑 ( 𝟏 − 𝑫 𝒓 )

Where; Where;
𝑻𝒅 = Trade discounts 𝑻𝒅 = Trade discounts
𝑳𝒑 = List price 𝑳𝒑 = List price
𝑵𝒑 = Net price 𝑫𝒓 = Discount rate
 Single Trade Discount
 represented as a percentage of the list price.
List Price – is the price for which retailer should sell the item. It is
also called as Suggested Retail Price(SRP).
Formulas;
𝑻𝒅
𝑳𝒑 = 𝑳𝒑 = 𝑵𝒑 + 𝑻𝒅
𝑫𝒓
Where;
Where;
𝑻𝒅 = Trade discounts
𝑻𝒅 = Trade discounts
𝑳𝒑 = List price
𝑳𝒑 = List price
𝑵𝒑 = Net price
𝑫𝒓 = Discount rate
Example
1. An item listed at Php80,000 is subject to a discount of 25%.
What are the amount of discount and the net price?

Given: Solution:

𝑳𝒑 = 𝑷𝒉𝒑𝟖𝟎, 𝟎𝟎𝟎 𝑻𝒅 = 𝑳𝒑 𝒙 𝑫𝒓
𝑫𝒓 = 𝟐𝟓% = 𝟎. 𝟐𝟓 𝑻𝒅 = 𝟖𝟎, 𝟎𝟎𝟎 𝒙 𝟎. 𝟐𝟓
𝑵𝒑 = ? 𝑻𝒅 = 𝑷𝒉𝒑𝟐𝟎, 𝟎𝟎𝟎
Thus, the amount of trade
𝑻𝒅 = ? discount is Php20,000.
𝑵𝒑 = 𝑳𝒑 − 𝑻𝒅
𝑵𝒑 = 𝟖𝟎, 𝟎𝟎𝟎 − 𝟐𝟎, 𝟎𝟎𝟎
𝑵𝒑 = 𝑷𝒉𝒑𝟔𝟎, 𝟎𝟎𝟎
Thus, the net price is Php60,000.
 Example
2. The JNT Garment Factory has sold Php20, 000 worth of clothes to the
Manansala Boutique Store. The given amount represents the retail
price of the clothes for which the JNT Garment Factory has offered a
35% trade discount.
a.) What is the actual amount paid by Manansala Boutique Store?
b.) What is the trade discounts?

Given: Solution:
𝑳𝒑 = 𝑷𝒉𝒑𝟐𝟎, 𝟎𝟎𝟎 𝑵𝒑 = 𝑳𝒑 ( 𝟏 − 𝑫𝒓 ) 𝑻𝒅 = 𝑳𝒑 − 𝑵𝒑
𝑫𝒓 = 𝟑𝟓% = 𝟎. 𝟑𝟓 𝑵𝒑 = 𝟐𝟎, 𝟎𝟎𝟎( 𝟏 − 𝟎. 𝟑𝟓) 𝑻𝒅 = 𝟐𝟎, 𝟎𝟎𝟎 − 𝟏𝟑, 𝟎𝟎𝟎
𝑵𝒑 = ? 𝑵𝒑 = 𝟐𝟎, 𝟎𝟎𝟎(𝟎. 𝟔𝟓) 𝑻𝒅 = 𝑷𝒉𝒑𝟕, 𝟎𝟎𝟎
Thus, the amount of trade
𝑻𝒅 = ? 𝑵𝒑 = 𝑷𝒉𝒑𝟏𝟑, 𝟎𝟎𝟎 discount is Php7,000.
Thus, the amount paid by Manansala
Boutique Store is Php13,000.
Example
3. A 30% discount on a desktop computer amounted to
Php15,000. What are the list price and the net price of the
computer?

Given: Solution:
𝑫𝒓 = 𝟑𝟎% = 𝟎. 𝟑𝟎 𝑻𝒅 𝑵𝒑 = 𝑳𝒑 − 𝑻𝒅
𝑳𝒑 =
𝑻𝒅 = 𝑷𝒉𝒑𝟏𝟓, 𝟎𝟎𝟎 𝑫𝒓 𝑵𝒑 = 𝟓𝟎, 𝟎𝟎𝟎 − 𝟏𝟓, 𝟎𝟎𝟎
𝑳𝒑 = ? 𝟏𝟓, 𝟎𝟎𝟎 𝑵𝒑 = 𝑷𝒉𝒑𝟑𝟓, 𝟎𝟎𝟎
𝑳𝒑 = Thus, the net price is Php35,000.
𝑵𝒑 = ? 𝟎. 𝟑𝟎
𝑳𝒑 = 𝑷𝒉𝒑𝟓𝟎, 𝟎𝟎𝟎
Thus, the list price is
Php50,000.
Example

4. What is the discount rate if the net price of an item is

Php5,567.80, after giving discount of Php252.20?
𝑻𝒅
𝑫𝒓 =
𝑳𝒑
Given: Solution: 𝟐𝟓𝟐. 𝟐𝟎
𝑵𝒑 = 𝑷𝒉𝒑𝟓, 𝟓𝟔𝟕. 𝟖𝟎 𝑳𝒑 = 𝑵𝒑 + 𝑻𝒅 𝑫𝒓 =
𝟓, 𝟖𝟐𝟎
𝑻𝒅 = 𝑷𝒉𝒑𝟐𝟓𝟐. 𝟐𝟎 𝑳𝒑 = 𝟓, 𝟓𝟔𝟕. 𝟖𝟎 + 𝟐𝟓𝟐. 𝟐𝟎 𝟏𝟑
𝑫𝒓 =
𝑫𝒓 = ? 𝑳𝒑 = 𝑷𝒉𝒑𝟓, 𝟖𝟐𝟎 𝟏𝟎𝟎
Thus, the list price is 𝟏𝟑
Php5,820.
𝑫𝒓 = 𝐗𝟏𝟎𝟎 %
𝟏𝟎𝟎
𝟏𝟑 𝟏
𝑫𝒓 = %=𝟒 %
𝟑 𝟑
𝟏
Thus, the discount rate is 𝟒 %.
𝟑
MULTIPLE TRADE DISCOUNTS
 Multiple Trade Discount
 two or more trade discount percentages which may apply to
the same list price. It is also called as discount series.

Formula;
Net Price on a Series Discounts
𝑵𝒑 = 𝑳𝒑 (𝟏 − 𝑫𝒓𝟏 )(𝟏 − 𝑫𝒓𝟐 ) (𝟏 − 𝑫𝒓𝟑 ) …(𝟏 − 𝑫𝒓𝒌 )

Where;
𝑫𝒓 = Discount rate
𝑳𝒑 = List price
𝑵𝒑 = Net price
 Multiple Trade Discount
 two or more trade discount percentages which may apply to
the same list price. It is also called as discount series.

Formula;

Discount Rate equivalent of series discounts

𝐃𝐫 = 𝟏 − (𝟏 − 𝑫𝒓𝟏 )(𝟏 − 𝑫𝒓𝟐 ) (𝟏 − 𝑫𝒓𝟑 ) …(𝟏 − 𝑫𝒓𝒌 )

Where;
𝑫𝒓 = Discount Rate
Example
1. An item listed for Php4,000 has been given trade discounts 0f
30%, 20%, and 10% by the manufacturer. What is the net
price? How much is the trade discounts? What single trade
discount rate is equivalent to these series of discounts?
Given: Solution:
𝑳𝒑 = 𝑷𝒉𝒑𝟒, 𝟎𝟎𝟎 𝑵𝒑 = 𝑳𝒑 ( 𝟏 − 𝑫𝒓 )
𝑫𝒓 = 𝟑𝟎% = 𝟎. 𝟑𝟎 𝑵𝒑 = 𝟒, 𝟎𝟎𝟎( 𝟏 − 𝟎. 𝟑𝟎)
𝑵𝒑 = ? 𝑵𝒑 = 𝟒, 𝟎𝟎𝟎( 𝟎. 𝟕𝟎)
𝑵𝒑 = 𝑷𝒉𝒑𝟐, 𝟖𝟎𝟎
𝑳𝒑 = 𝑷𝒉𝒑𝟐, 𝟖𝟎𝟎 𝑵𝒑 = 𝑳𝒑 ( 𝟏 − 𝑫𝒓 )
𝑫𝒓 = 𝟐𝟎% = 𝟎. 𝟐𝟎 𝑵𝒑 = 𝟐, 𝟖𝟎𝟎( 𝟏 − 𝟎. 𝟐𝟎)
𝑵𝒑 = ? 𝑵𝒑 = 𝟐, 𝟖𝟎𝟎( 𝟎. 𝟖𝟎)
𝑵𝒑 = 𝑷𝒉𝒑𝟐, 𝟐𝟒𝟎
Example
1. An item listed for Php4,000 has been given trade discounts 0f
30%, 20%, and 10% by the manufacturer. What is the net
price? How much is the trade discounts? What single trade
discount rate is equivalent to these series of discounts?

Given: Solution:
𝑳𝒑 = 𝑷𝒉𝒑𝟐, 𝟐𝟒𝟎 𝑵𝒑 = 𝑳𝒑 ( 𝟏 − 𝑫𝒓 )
𝑫𝒓 = 𝟏𝟎% = 𝟎. 𝟏𝟎 𝑵𝒑 = 𝟐, 𝟐𝟒𝟎( 𝟏 − 𝟎. 𝟏𝟎)
𝑵𝒑 = ? 𝑵𝒑 = 𝟐, 𝟐𝟒𝟎( 𝟎. 𝟗𝟎)
𝑵𝒑 = 𝑷𝒉𝒑𝟐, 𝟏𝟎𝟔
Thus, the net price is
Php2,016.
Example
1. An item listed for Php4,000 has been given trade discounts 0f
30%, 20%, and 10% by the manufacturer. What is the net
price? How much is the trade discounts? What single trade
discount rate is equivalent to these series of discounts?

Given: Solution: 𝑻𝒅
𝑫𝒓 =
𝑳𝒑 = 𝑷𝒉𝒑𝟒, 𝟎𝟎𝟎 𝑻𝒅 = 𝑳𝒑 − 𝑵𝒑 𝑳𝒑
𝑵𝒑 = 𝑷𝒉𝒑𝟐, 𝟎𝟏𝟔 𝑻𝒅 = 𝟒, 𝟎𝟎𝟎 − 𝟐, 𝟎𝟏𝟔 𝟏, 𝟗𝟖𝟒
𝑫𝒓 =
𝑻𝒅 = ? 𝑻𝒅 = 𝑷𝒉𝒑𝟏, 𝟗𝟖𝟒 𝟒, 𝟎𝟎𝟎
Thus, the amount of trade 𝑫𝒓 = 𝟎. 𝟒𝟗𝟔
discount is Php1,984. 𝑫𝒓 = 𝟒𝟗. 𝟔%
Thus, the single rate equivalent
to 30%, 20%, and 10% is 𝟒𝟗. 𝟔%.
Example
2. The list price of a new model of a cellphone is Php40, 500,
subject to 15%, 20%, and 5% discounts. Find the following;
a.) Single rate equivalent
b.) Net price
c.) Trade discount
Given: Solution:
𝑳𝒑 = 𝑷𝒉𝒑𝟒𝟎, 𝟓𝟎𝟎 𝐃𝐫 = 𝟏 − 𝟏 − 𝑫𝒓𝟏 𝟏 − 𝑫𝒓𝟐 𝟏 − 𝑫𝒓𝟑
𝑫𝒓𝟏 = 𝟏𝟓% = 𝟎. 𝟏𝟓 𝐃𝐫 = 𝟏 − (𝟏 − 𝟎. 𝟏𝟓)(𝟏 − 𝟎. 𝟐𝟎) (𝟏 − 𝟎. 𝟎𝟓)
𝑫𝒓𝟐 = 𝟐𝟎% = 𝟎. 𝟐𝟎 𝐃𝐫 = 𝟏 − (𝟎. 𝟖𝟓)(𝟎. 𝟖𝟎) (𝟎. 𝟗𝟓)
𝑫𝒓𝟑 = 𝟓% = 𝟎. 𝟎𝟓 𝐃𝐫 = 𝟎. 𝟑𝟓𝟒
𝑫 𝒓 = ? 𝑵𝒑 = ? 𝐃𝐫 = 𝟑𝟓. 𝟒%
Thus, the single rate equivalent to 15%, 20%,
𝑻𝒅 = ? and 5% is 35.4%.
 Example
2. The list price of a new model of a cellphone is Php40, 500,
subject to 15%, 20%, and 5% discounts. Find the following;
a.) Single rate equivalent
b.) Net price
c.) Trade discount
Given: Solution:
𝑳𝒑 = 𝑷𝒉𝒑𝟒𝟎, 𝟓𝟎𝟎 𝑵𝒑 = 𝑳𝒑 ( 𝟏 − 𝑫𝒓 ) 𝑻𝒅 = 𝑳𝒑 − 𝑵𝒑
𝑫𝒓 = 𝟎. 𝟑𝟓𝟒 𝑵𝒑 = 𝟒𝟎, 𝟓𝟎𝟎( 𝟏 − 𝟎. 𝟑𝟓𝟒) 𝑻𝒅 = 𝟒𝟎, 𝟓𝟎𝟎 − 𝟐𝟔, 𝟏𝟔𝟑
𝑵𝒑 = 𝟐, 𝟐𝟒𝟎( 𝟎. 𝟔𝟒𝟔) 𝑻𝒅 = 𝑷𝒉𝒑𝟏𝟒, 𝟑𝟑𝟕
Thus, the amount of trade
𝑵𝒑 = 𝑷𝒉𝒑𝟐𝟔, 𝟏𝟔𝟑 discount is Php14,337.
Thus, the net price is
Php26,163.
Example
3. The list price of a washing machine is Php30, 500, subject to
10% trade discount. What additional discount should be given to
bring down the price to Php20, 000?
Solution:
𝑵𝒑 = 𝑳𝒑 ( 𝟏 − 𝑫𝒓𝟏 )(𝟏 − 𝑫𝒓𝟐 )
Given: 𝟐𝟎, 𝟎𝟎𝟎 = 𝟑𝟎, 𝟓𝟎𝟎( 𝟏 − 𝟎. 𝟏𝟎)(𝟏 − 𝑫𝒓𝟐 )
𝑳𝒑 = 𝑷𝒉𝒑𝟑𝟎, 𝟓𝟎𝟎 𝟐𝟎, 𝟎𝟎𝟎 = 𝟑𝟎, 𝟓𝟎𝟎( 𝟎. 𝟗𝟎)(𝟏 − 𝑫𝒓𝟐 )
𝑫𝒓𝟏 = 𝟏𝟎% = 𝟎. 𝟏𝟎 𝟐𝟎, 𝟎𝟎𝟎 = 𝟐𝟕, 𝟒𝟓𝟎 𝟏 − 𝑫𝒓𝟐
𝑵𝒑 = 𝑷𝒉𝒑𝟐𝟎, 𝟎𝟎𝟎 𝟐𝟎, 𝟎𝟎𝟎 = 𝟐𝟕, 𝟒𝟓𝟎 𝟏 − 𝑫𝒓𝟐
𝟐𝟕, 𝟒𝟓𝟎 𝟐𝟕, 𝟒𝟓𝟎
𝑫𝒓𝟐 = ? 𝟐𝟎, 𝟎𝟎𝟎
= 𝟏 − 𝑫 𝒓𝟐
𝟐𝟕, 𝟒𝟓𝟎
𝟐𝟎, 𝟎𝟎𝟎
𝑫𝒓𝟐 = 𝟏 −
𝟐𝟕, 𝟒𝟓𝟎
𝑫𝒓𝟐 = 𝟎. 𝟐𝟕𝟏𝟒 = 𝟐𝟕. 𝟏𝟒%
Thus, the additional discount rate needed to bring
down the net price to Php20,000 is 27.14%.
MOTIVATION OF THE DAY
The trade of banks is the
Buying and Selling of
Interest and Exchange.

- William Petty