Name: finswec Key Period: __ Packet 9: Discounts and Sales Tax What isa discount? unt token oo lomethins ‘There are 2 methods to calculate discount for an item. Use whatever method you like best. Method 1 1, Ttem Amount x Discount Rate = Discount Amount 2. Ttem Amount - Discount Amount = Sale Price Method 2 1. Ttem Amount x (100% - Discount Rate) = Sale Price Use both methods to calculate the sole price of 40%. ‘an item that costs $140 and has a discount of WHO x Yo= Bu 140-5 Benefits of Method 140 x .Lo Benefits of Method You Knows the exact Amount that is deducted. T+ ss less steps.‘The original price of a shirt is $18. The shirt is on sale for 0 20% discount. What is the sale price af the shirt? 18 ¥.80= [Fiy-40\ . Tn a department store, a $40 dress is marked, “Save 25%” What is the discount? What is the sale price of the dress? 4o x.25 -10 [S10 discount) #30 sale price] Ina grocery core, «$12 cos of cde i labeled, "Geta 20% dccount* What ic the fee ete ee 12 x.20 i Ho TZ 4o discount] (69.60 sale pace Ina candy store, 0 $6.00 jar of candy is labeled, "50% off." What Is the discount? What ic the sale price of the jr of enndy? s x6 2.50 = 2-S0 *2,50 discount $2.50 gale price 3. Tn a bicycle store, a $500 bicycle is marked, "Get a 30% discount." What is the sole price: of the bicycle? 500 x .70 F360 3. At best buy they have a 42" TV that sells for $1250 and ison sale for 15%, What is the: sale price? [250 K 8S . 5ven the Sse Price and tc Rate. fin the Orginal Price, A tem rection efor $70. Twat decated 10%, What woe the erga pie of he fem ceed Sole Pree 100f- Discount Rete Given the Sale Price and the Original Price, find the Discount Rate, (My sneakers cost $80. They were on sale for $32. What was the discount rate? Bo-32_ Cost - Sale Price fo Cost [-Toriginal Price | Discount Rate | = Work Space = |—Sale Price: ara 1| saz 39% Seal $]29.32 L 2) ger 1% 812 « 87 700.44 $ 56.41 a/ FIN 49% “SI $5661 alsaqy | we | 288-7! sran Ay . | 318-2a3.u5 5) $365 29% ——s\- an $223.05 31 -U3l.Se of am | ayy) Setcbatse on‘Series of Discounts ‘Sometimes businesses ore rewarded with additional discounts. For example, Sur's Muffins may receive on inital discount of 25% automaticaly. Then, gets an additional 20% if its accumulated purchases were between $10,000 and $25,000 the previous year and another 10% if ‘accumulated purchases were more than $25,000 during the previous year. Therefore Suz's ‘Muffins could have discounts of 25%, 20%, and 10%, called a series of discounts. Example 1 Federated Food Supply sella set of mixing bouls foro list price of $480. Suzi's Muffins ‘qualifies forthe series of discounts: 25%, 20%, 10%. Calculate the net price using the discount method. U0 x. 95 = 360 Boo x .8o= ase age x .90-Fas9. aol Complement Method Shortcut ‘When using the complement rates, you can just multiply the list price by all of the complement rates to caleulate the net price. Try it for Example 1 480 * (75x, %0 «,90) =|8259. 20\ Example 2 ‘Tack Hackett Roofing is purchasing redwood shakes to reroof a house. The shakes have alist price of $14,400. The Northwest Roofing Company jives Jack the normal trade discount of 20%. In addition, Northwest gives Jack two further trode discounts of 10% and 5% because of the large volume of business that Jack has done with Northwest so far this year. What is ‘Tock’s net price on the order of redwood shakes? IMH00 x (80% 90 * 98) = 9.349 co]Calculating the Equivalent Single Discount Rate How would you compare a company that offers a straight 45% discount to a company that offers a discount series of 25%, 20%, 10%? Let's say, something costs $100. Calculate the net cost using both types of discounts. loo Joox(. 75x, Bo x, 40) x55 $55 | ‘Steps to Computing the Equivalent Single Discount Rate Example: 26%, 20%, 10% 1. Calculate the complement of each rate, .15 489) gto 2. Multiply the complement rates and write as a percent. 54 3. Subtract the product (percent) from 100% to get the equivalent single discount rate, 4% Example 1: ‘A series of discounts is 40%, 20%, and 5%. Find the equivalent single discount. (- 0) (86) (.98) = 456 100-§.45U = ,s44-[54.4% Practice the fllowing by finding the equivalent single discount rate. Round tothe nearest tenth of a percent. 1 30%, 20%,5% (,70)(..80)(,98) = .532 10.8% | % 20%.10%.5% (99) (,40) (.95) = ,U a4 (Bi-ex\ sFind the complement rates and the net prio ucing the Equivalent single Diccount Rate: 3. List Price: $1,200 Trade Discounts: 50%, 40%, 10% (5 *.G*,9 « 1200 = [¥324\ 4, List Price: $7,400 Trade Discounts: 15%, 10%, 3% (88 * 90 ¥,97) «7,400 =|°5,491.17 5. List Price: $8,480 Trade Discounts: 25%, 12%, 4% (75 *, 88 x We) «8,480 <5, 372.93 What is Sales Tox? Whatis sales tax? ier ste, Where does sles taro? ——The_local_and stake goveraments __ Whatitems are taxed? ee Clothes | Most food (milk, bread, etc) Candy Stamps Pop Electronics‘Adding Tax to Items When you purchase items, a sales tax is added to the price of the item. ‘Tn Niagara County, they oddan__2__% sales tax. ‘Steps to figuring out Sales Tax and Total Cost of an item costing: $_| 5 1. Change the percent to a decimal. R_4=_.08 2. Multiply the decimal by the cost + of the item. This is the tox. (18 (208 ps 1.20 3. Add the tax to the cost of the $ item. 5S +120 1 Exomple 1: Your bill comes to $32.46, Calculate the sles tax and the total bill with tax. 32.4 32.4u ee + 2.40 beet 2.5968 $35.0 Use the worksheet below to help you determine what you can BUY with $100. Coleulate al sales ‘taxes ond add them to the cost. Add up all of the total costs of the items. You must purchase five items (no more and no less). Whoever is closest to $100 without going over will win a special prize, Trem Selling Tax Total Cost Price Ex. Blue Shirt $899 Total Cast:‘Soles Tax ond Discount Word Problems 1 Several taxable items are sold at a retail price of $21.50. The soles tax rate is 8% ‘What is the total amount of tax and the total amount to be paid? 21.50 x. 08 F).72 7 21.56 + 1.72 #23.2a\ 2. A table was purchased for $70.00 less a 5% trade discount. The soles tax rate was 8%. How much was paid forthe table? To Ge.50 x95 x 1.08 Wu.50 \$71.82 \ 3. Rico Corty lives ina state having a sales tax rate of 8%. Carty erossed the state line into a state having a Sales tax rate of 3% to make a purchase in the amount of $5,743. Compute the amount Carty saved in sales tax by purchasing inthe neighbering state Rize Home State | Next State 5,743 5,743 (202.44 ¥ 1.08 ¥ 1.03 ~ 5915.29 (braeawa) 4. Acustomer bought the following items: 1 Milk $249 2, Orange Juice $2.89 2. soap $4.75 The tocrateis 8%. What was the total east? 9.9 man 4.715 SAB x1.08 44 5.135. Alfredo Griffin lives na state having a sales tax of 6%. Griffin crossed the state line into a state having a 3% tax rate to make a purchase inthe ameunt of $562. Lf ‘transportation to the next state cost Griffin $20, compute the gainv/lass by purchasing inanather state Home State | Next State 595.72 562 562 578.36 -598.8 xO x1,03 +20 fa is] 5495.72 S7r.8e 5ae.e0 |U> : 6. Tony Fernandez planned to purchase furniture costing $29,900. The soles tax in Fernandex's home state was 8%. The sales tax ina neighboring state was 3%. Delivery charge from the neighboring tate would be $1,000. Compute the goin/loss by purchasing furniture from the neighboring state. Home Stote | Next State 32,292 29,900 - 31,797 x 1-03 ed $Y 95 aa 30,747 4q , 30,797 atte 31,797