Lesson #2 (2nd QTR - 1st Sem) Trade Discount

SOUTHERNSIDE MONTESSORI SCHOOL
Camella Homes IV, Poblacion, Muntinlupa City
SENIOR HIGH SCHOOL

Accountancy, Business, and Management
SPECIALIZED & APPLIED SUBJECT: BUSINESS MATH
SY 2023 – 2024
Second Quarter – First Semester
CHAPTER 3 : BUYING AND SELLING

Lesson #2
Topic : Trade Discount
Objectives: a. identify the original price, and rate in a problem,

b. compute single trade discount, and
c. solve problem on original price, discount, and rate.
Consider the problem:
Aubrey purchases 8 pairs of denim jeans at a discount of 25%, which are listed at a
price of Php 1 200 per piece. How much does each denim jeans cost? How much will he
save from buying 8 pairs of denim pants?
Note : It is ordinary to see discounts on prices of goods or commodities so that business

owners will increase their sales by encouraging customer to purchase in large
quantities. It is one way to attract more people and keep updated with price changes
after list of goods have been printed.
Trade discount problems are percentage related probles. We call the formula ;
P = B x R where percentage ( P ) is the trade discount , the base ( B ) is the
original price of goods or commodity , and rate ( R ) is the discount rate.
Going back to the problem:

Original Price (B) = Php 1 200
Rate of Discount (R) = 25 % = 0.25
Trade Discount (P) = _______
Solution:
𝐓𝐫𝐚𝐝𝐞 𝐃𝐢𝐬𝐜𝐨𝐮𝐧𝐭 = 𝐎𝐫𝐢𝐠. 𝐏𝐫𝐢𝐜𝐞 𝐱 𝐑𝐚𝐭𝐞 𝐨𝐟 𝐃𝐢𝐬𝐜.
= Php 1 200 x 0.25
Trade Discount = Php 300
The price for the pair of jeans = Original Price – Trade Discount
= Php 1 200 – Php 300
= Php 900
The total discount from buying 8 pairs of jeans is :
8 x Php 300 = Php 2 400
Therefore : Aubrey could save Php 2 400 from buying 8 pairs of jeans..
A trade discount is the amount by which the retail price/ original price is
reduced by the manufacturer when it is sold to the reseller or customer. Trade
discount problem are percentage related problems.
The formula used to solve for the trade discount is given by :
Trade discount = Original Price x Rate of Discount
Example #1
Alliah saved a total of Php 1 200 after a 15% discount was given to all her
purchases, how much was her total purchase?
Solution :
Trade Discount : Php 1 200
Rate of Discount: 15 % = 0.15
Total Purchase/Original price : _______
𝑇𝑟𝑎𝑑𝑒 𝐷𝑖𝑠𝑐𝑜𝑢𝑛𝑡
Total Purchase = 𝑅𝑎𝑡𝑒 𝑜𝑓 𝐷𝑖𝑠𝑐𝑜𝑢𝑛𝑡
𝑃ℎ𝑝 1 200
= 0.15
= Php 8 000
Therefore : Alliah’s total purchase is Php 8 000.
Example #2
A split type inverter air conditioner unit listed at Php 36 000 with a discount
of Php 7 200 is offered to a customer. Determine the Rate of Discount?
Solution :
Original Price: Php 36 000
Trade Discount : Php 7 200
Rate of Discount : ______
Rate of Discount = 𝑂𝑟𝑖𝑔𝑖𝑛𝑎𝑙 𝑃𝑟𝑖𝑐𝑒
𝑃ℎ𝑝 7 200
= 𝑃ℎ𝑝 36 000 = 0.2
Rate of Discount = 20%
Therefore : The rate of discount is 20%.
Example #3
All Day’s Supermarket places a Php 3 500 worth of order for assorted
brands of imported chocolate. The chocolate wholesaler gave a 25% discount.
How much is the trade discount?
Solution :
Original Price : Php 3 500
Rate of Discount: 25% = 0.25
Trade Discount : ________
Trade Discount = Orig. Price x Rate of Discount

= Php 3 500 x 0.25
Trade Discount = Php 875
Therefore : The trade discount is Php 875.
We see in the problem that the more employees on a job, the less time take
Example #4
In a video store, a DVD that sells for Php 375 is marked 10% off. What is the
trade discount? What is the sale price of the DVD?
Solution :
Original Price: Php 375
Trade Discount: ________
Sale Price: _______
Trade Discount = Orig. Price x rate of Discount

= Php 375 x 0.01
Trade Discount = Php 37.50
Sale price = Original Price – Trade discount

= Php 375 – Php 37.50
Sale price = Php 337.50
Therefore: The trade discount of DVD is Php37.50 and its sale price is Php 337.50.
Example #5
The 40% discount on a tennise racket amounts to Php 2 360. Compute for
the original price and the net price?
Solution:
Trade Discount: Php 2 360
Original Price: ________
Net price : ___________
Original Price = 𝑅𝑎𝑡𝑒 𝑜𝑓 𝐷𝑖𝑠𝑐𝑜𝑢𝑛𝑡
𝑃ℎ𝑝 2 360
= 0.40
Original price = Php 5 900
Net Price = Original Price – Trade Discount
= Php 5 900 – Php 2 360

Net Price = Php 3 540
Therefore : Tennis racket’s original price is Php 5 900 and it’s net price is
Php 3 540

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SOUTHERNSIDE MONTESSORI SCHOOL

Camella Homes IV, Poblacion, Muntinlupa City

SENIOR HIGH SCHOOL

CHAPTER 3 : BUYING AND SELLING

Objectives: a. identify the original price, and rate in a problem,

Consider the problem:

Note : It is ordinary to see discounts on prices of goods or commodities so that business

Going back to the problem:

Trade Discount = Orig. Price x Rate of Discount

Therefore : The trade discount is Php 875.

Trade Discount = Orig. Price x rate of Discount

Sale price = Original Price – Trade discount

Net Price = Original Price – Trade Discount

= Php 5 900 – Php 2 360

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