Word problem on trade discount

Topic:-Trade discount

Trade discount is a discount from the list price of a commodity allowed by a manufacturer or wholesaler to a merchant.

Manufacturers and dealers often allow to their best customers, and those buying in large quantities, what is known as trade discount. This means that a discount is allowed from the amount of the bill.

Let's see a word problem on this.

Question:-

The market price of an article is $18,000. By selling it at a discount of 20% the loss is 4% find its cost price.

Solution :-

Market price = $18,000 and discount = 20%

Therefore, Selling price = M.P(100 - d%) / 100

= 18,000 (100 - 20) / 100

= 18,000 * 80 / 100

Selling price = 14,400

Selling price = $14,400 and loss = 4%

Therefore, Cost price = (Selling price * 100) / (100 - l%)

= (14,400 * 100) / (100-4)

= 1,440,000 / 96

Cost price = $15,000



For more help on this ,you can reply me.