A discount is the allowance in percentage allowed a buyer by the seller on the purchase price of an article.
a. Cash Discount: This is the allowance given to the buyer by the seller for payment in cash for an article bought either immediately or within the stipulated time limit.
b. Quantity Discount: This is the allowance given to the buyer the buyer for buying an article above the stipulated quantity.
Examples:
1. A buyer paid #798 for an article over which he enjoyed 5% cash discount.
How much was the market price?
Solution
Discount = 5%
Percentage paid = (100 – 5)% = 95%
Market Price = \( \frac{798}{95} \; \times \; \frac{100}{1} \)
Market Price = #840.00
2. An article was marked at #25.40k per unit. The seller allows for 2% discount on the purchase of 20-30 units at a time. Find how much a buyer pays for 28units.
Solution
28 units discount is 2%
Amount paid = (98% of #25.40) × 28
= \(\left ( \frac{98}{100} \; \times \; \scriptsize 25.40 \right) \scriptsize \; \times \; 28 \)
= 698.98k
Exercise
1. An article was marked at #25.40 per unit. The seller allows for 3% discount on purchase of 31-40 units and 4% for 41 units and above. Find out how much a buyer of the following quantities will pay
i. 35 units ii. 60 units
2. A seller marks an article to gain 26% but allows 4% discount. Find the price he sells an article bought for #500
3. Find the time in which #2200.00 generates simple interest on #396 at 3%.
4. Find the compound interest on #9000.00 in 3years at 4% per annum.
Responses