Trade Discount—Complement Method

pp. 489-491SECTION 15-2SECTION 15-2

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MBA, Section 15-2, Slide 2 of 16

15-2

Section ObjectiveSection ObjectiveCalculate:

• net price using the complement method

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MBA, Section 15-2, Slide 3 of 16

15-2

Key Words to KnowKey Words to Know

complement method (p. 489)

A way to find the net price of a discounted item by subtracting the discount rate from 100 percent.

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MBA, Section 15-2, Slide 4 of 16

15-2

Net Price = List Price × Complement of Trade-Discount Rate

FormulaFormula

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MBA, Section 15-2, Slide 5 of 16

15-2

Restoring Vintage Vehicles p. 489Restoring Vintage Vehicles p. 489

What is the complement of 35 percent?

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MBA, Section 15-2, Slide 6 of 16

15-2

The list price of an electronic ignition module in the wholesaler’s catalog is $845.

Repair shops receive a 40 percent trade discount.

What is the net price of the module?

Example 1Example 1

SECTION

MBA, Section 15-2, Slide 7 of 16

15-2

Find the complement of trade-discount rate.

100% – 40% = 60%

Example 1 Answer: Example 1 Answer: Step 1Step 1

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MBA, Section 15-2, Slide 8 of 16

15-2

Find the net price.

List Price × Complement of Trade-Discount Rate

$845.00 × 60% = $507

Example 1 Answer: Example 1 Answer: Step 2Step 2

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MBA, Section 15-2, Slide 9 of 16

15-2

Net Price = List Price × Percent Price

FormulaFormula

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MBA, Section 15-2, Slide 10 of 16

15-2

Shelita Reeves runs Affiliated Lumber and buys paint from Dap Corporation.

Dap grants a 40 percent trade-discount rate to all retail outlets.

How much does Reeves pay for a case of white ceiling paint if it retails for $132.

Example 2Example 2

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MBA, Section 15-2, Slide 11 of 16

15-2

Step: Find the net price

List Price = List Price × Percent Price

$132.00 × (100% − 40%)

$132.00 × 60% = $79.20

Example 2 AnswerExample 2 Answer

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MBA, Section 15-2, Slide 12 of 16

15-2

Partyland receives a 23 percent trade discount. What will Partyland pay for the following items?

Paper plates @ $1.57

Plastic cups @ $1.09

Plastic cutlery @ $0.99

Practice 1Practice 1

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MBA, Section 15-2, Slide 13 of 16

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Paper plates: $1.21

Plastic cups: $0.84

Plastic cutlery: $0.76

Practice 1 AnswerPractice 1 Answer

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MBA, Section 15-2, Slide 14 of 16

15-2

Find the net price.

List price: $295.79

Trade-discount rate: 32%

Practice 2Practice 2

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MBA, Section 15-2, Slide 15 of 16

15-2

$201.14

Practice 2 AnswerPractice 2 Answer

Trade Discount—Complement Method

END OF SECTION 15-2END OF SECTION 15-2