Cash

Discounts
 Cher Crystelle
@advanced_math07

A cash discount is a reduction in price that

is often offered to provide customers with
added incentive to become regular buyers
of a particular company.

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 Cher Crystelle
@advanced_math07

Words to remember!
The invoice price is the initial price that the
manufacturer charges the dealer.
Net price is the value at which a product or
service is sold after all discounts subtracted.

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 Cher Crystelle
@advanced_math07

Methods of calculating discounts

1. When a single discount rate is used.
Here the buyer is offered a single discount rate
for all purchases that meet a certain condition.

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 Cher Crystelle
@advanced_math07

1. When a single discount rate is used.

Formulas:
cash discount = invoice price – net price cash discount = invoice price x discount rate

net price = invoice price – cash discount

discount rate

invoice price invoice price

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 Cher Crystelle
@advanced_math07

Example 1
A man bought a shirt at 20% discount. If the
invoice price ₱2,000, find the net price of the shirt.
Given: Solution:
discount rate = 20% or 0.20 cash discount = invoice price x discount rate
invoice price = ₱2,000 cash discount = ₱2,000 x .20 =400
net price = invoice price – cash discount
net price = ₱2,000 – 400 = ₱ 1,600

1.2k likes
 Cher Crystelle
@advanced_math07

Example 1
A man bought a shirt at 20% discount. If the
invoice price ₱2,000, find the net price of the shirt.
Given: Solution:
discount rate = 20% or 0.20 cash discount = invoice price x discount rate
invoice price = ₱2,000 cash discount = ₱2,000 x .20 =400
net price = invoice price – cash discount
net price = ₱2,000 – 400 = ₱ 1,600

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 Cher Crystelle
@advanced_math07

Example 2
George bought a jacket at 10% discount. If he
paid ₱1,800, find the invoice price of the jacket.
Given: Solution:
discount rate = 10% or 0.10 invoice price
net price = ₱1,800
invoice price

invoice price = ₱2,000

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 Cher Crystelle
@advanced_math07

Example 3
Abraham bought an office equipment at 20%
discount. If he paid ₱20,000 cash, find the invoice price of
the equipment.
Given: Solution:
discount rate = 20% or 0.20 invoice price
net price = ₱20,000
invoice price
invoice price = ₱25,000
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 Cher Crystelle
@advanced_math07

Example 4
The cash price of a certain brand of car is ₱2,800,000. During
a sale, cash discount of 15% is given. How much does a customer
pay for the car?
Given: Solution:
discount rate = 15% or 0.15 cash discount = invoice price x discount rate
invoice price = ₱2,800,000 cash discount = ₱2,800,000 x .15 = ₱420,000
net price = invoice price – cash discount
net price = ₱2,800,000 – ₱420,000
= ₱ 2,380,000
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 Cher Crystelle
@advanced_math07

2. When more than one discount rates are used.

Sometimes a series of discount rates is given
when different quantities of goods are bought
by customers. In this case, we use equivalent
single discount rate.

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 Cher Crystelle
@advanced_math07

Steps in solving for the discount series:

( using equivalent single discount rate)
1. Express all discount decimals.
2. Subtract each of the result in step (1) from 1. 
3. Multiply results in step (2) together.
4. Subtract from 1 the product obtained from step (3). The
remainder must be changed to percent.
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 Cher Crystelle
@advanced_math07

Example
A buyer is offered by an appliance store with a 10%
and 15% cash discount on goods up to ₱60,000. So if Andy
bought goods worth ₱65,000, how much is her total
discount?

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Example
A buyer is offered by an appliance store with a 10% and 15% cash discount on goods up
to ₱60,000. So if Andy bought goods worth ₱65,000, how much is her total discount?

Given: discount rates= 10% and 15% invoice price = ₱65,000

1. Express all discount decimals. :0.10 and 0.25
2. Subtract each of the result in step (1) from 1. :1 – 0.10 = 0.90 1 – 0.15 =0.85
3. Multiply results in step (2) together. :0.90 x 0.85 = 0.765
4. Subtract from 1 the product obtained from step (3). The remainder must be changed to
percent. 1- 0.765 = 0.235 discount rate
Given: discount rate = 0.235 Solution: cash discount = invoice price x discount rate
invoice price = ₱65,000 = ₱65,000 x 0.235
= ₱ 15,275
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 Cher Crystelle
@advanced_math07

Exercise 4
1. The price of a luxury car in a showroom is ₱3,400,000. A
discount of 8.5% is allowed when a customer pay cash.
Determine the total amount a customer should pay for the car.
2. Find the discount of a motorbike priced at ₱40,000 but sold off at
a discount of 7 1/2%. How much was paid for it?
3. You just purchased a computer for ₱70,000. The store gave a 3% cash
discount because you pay for the computer immediately with cash.
What is the value of the discount?

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 Cher Crystelle
@advanced_math07

Exercise 4
4. The price of a math book is ₱750, but you have only ₱500 with
you. If you get a cash discount of 20%, how much money do
you need to borrow from a friend so that you can buy the
book?
5. A tablet is offered to buyers at a list price of ₱42,000 less 5%
and 15% cash discounts when a customer pay cash.
(a) Determine the total discount.
(b) What is the net price?
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