A $50 thermometer is sold in bulk to your store for $42. Calculate the trade discount rate.
Answer (1)
Calculate the trade discount: D = L − S = 50 − 42 = 8 .
Calculate the trade discount rate: R = L D = 50 8 = 0.16 .
Convert the trade discount rate to a percentage: 0.16 × 100 = 16% .
The trade discount rate is 16% .
Explanation
Understanding the Problem We are asked to calculate the trade discount rate for a thermometer. The thermometer has a list price of $50 and is sold to the store for $42.
Calculating the Trade Discount First, we need to find the trade discount, which is the difference between the list price and the selling price. Let L be the list price and S be the selling price. The trade discount D is given by: D = L − S
Trade Discount Value Substituting the given values, we have: D = 50 − 42 = 8 So, the trade discount is $8.
Calculating the Trade Discount Rate Next, we need to find the trade discount rate, which is the trade discount divided by the list price. Let R be the trade discount rate. Then: R = L D
Trade Discount Rate Value Substituting the values, we get: R = 50 8 = 0.16
Trade Discount Rate Percentage To express the trade discount rate as a percentage, we multiply by 100: R × 100 = 0.16 × 100 = 16% Therefore, the trade discount rate is 16%.
Final Answer The trade discount rate is 16%.
Examples
Imagine you're buying a new video game for $60, but the store offers a discount and you only pay $45. Calculating the trade discount rate helps you understand the percentage of savings you're getting. In this case, the discount is $15, and the trade discount rate is 25%. This concept is useful in everyday shopping to assess the value of discounts and make informed purchasing decisions.
