Discounts
Xcel Learning Notes
Introduction to Discounts
In consumer arithmetic, a discount represents a reduction in the original price of a product or service. This incentive is used by sellers to encourage customers to make a purchase by allowing them to pay less than the advertised cost.
• The Marked Price (or List Price) is the original price of an item before any reductions.
• The Discount is the specific dollar amount or percentage subtracted from the marked price.
• The Discounted Price (or Sale Price) is the final amount the customer pays after the deduction is made.
📌 Exam Tip
Always read the question carefully to see if it asks for the ‘discount value’ (the money saved) or the ‘sale price’ (the final amount paid).
Calculating the Discounted Price
When the discount is given as a fixed dollar amount, the calculation is a simple subtraction. This process determines the actual cost to the consumer after the price drop.
1. Identify the original marked price.
2. Identify the discount amount in dollars.
3. Subtract the discount from the marked price to find the final price.
Key Formula
Discounted Price = Marked Price − Discount Amount
⚠ Common Mistake
Do not confuse the discount with the final price. The discount is what you SAVE, not what you PAY.
Working with Percentage Discounts
Often, discounts are advertised as a percentage (%) of the marked price. To find the final price in these cases, you must first convert the percentage into a monetary value.
• Step 1: Calculate the Discount Value by multiplying the percentage by the marked price.
• Step 2: Subtract that value from the original marked price to get the Discounted Price.
• Alternatively, if an item is 20% off, you are paying for 80% of the item (100% − 20% = 80%). You can multiply the marked price by 80% to find the final price directly.
Key Formula
Discount Value = (% Discount / 100) × Marked Price
Discounted Price = Marked Price − Discount Value
Discounted Price = Marked Price − Discount Value
✏️ Practice Questions
- A Nintendo Switch costs $300 USD. If a retailer offers a 7% discount for their Black Friday promotion, how much will a customer pay?
- A music store sells guitar strings for $360 GYD. If the store offers a 5% discount on each guitar string, how much will a customer pay for 30 guitar strings?
- An item with a marked price of $1,200 is sold for $1,020. Calculate the percentage discount given.
- A dress is sold at a 15% discount. If the discount amount was $45, what was the original marked price of the dress?
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