Problema Solution
Jones Manufacturing offers chain discounts of 5/4/2 to many of its preferred customers. Rowly Dress Shop purchased 40 dresses that had a total list price of $1,400. What was the net price paid by Rowly? What was the amount of trade discount? Use the net price equivalent rate and single equivalent discount rate in your calculations. Round final answers to nearest cent
Answer provided by our tutors
Net price equivalent rate is:
[(100-5)/100][(100-4)/100][(100-2)/100] = 0.89376
The net price paid is:
0.89376*1400 = $1251.26
Single equivalent discount rate is:
1-0.89376 = 0.10624
The amount of trade discount is:
0.10624 *1400 = $148.74
Therefore, the net price paid was $1251.26 and the amount of trade discount was $148.74.