A trader altered this trade discount from 20% to 25%. By what percenta...
Introduction:
A trade discount is a deduction offered by the seller to the buyer on the list price of the goods. The trader has increased the trade discount from 20% to 25% and wants to keep the amount available to him unchanged. In this scenario, we need to calculate by what percentage the selling price should be altered so that the amount available to the trader remains unchanged.
Calculation:
Let's assume the list price of the goods to be $100.
With the initial trade discount of 20%, the selling price would be:
Selling price = List price - Trade discount
Selling price = $100 - 20% of $100
Selling price = $80
Now, the trader has increased the trade discount to 25%. Let's calculate the new selling price:
New selling price = List price - Trade discount
New selling price = $100 - 25% of $100
New selling price = $75
We know that the trader wants to keep the amount available to him unchanged. This means that the difference between the list price and the selling price should remain the same.
Let's calculate the difference between the list price and the selling price with the initial trade discount:
Amount available to trader = List price - Selling price
Amount available to trader = $100 - $80
Amount available to trader = $20
Now, we need to find the selling price with the new trade discount that would give the same amount available to the trader:
Amount available to trader = List price - Selling price
$20 = $100 - New selling price
New selling price = $80
Therefore, the new selling price with the increased trade discount of 25% should be $80 to keep the amount available to the trader unchanged.
Conclusion:
To keep the amount available to the trader unchanged, the selling price should be altered by a decrease of 6.25%. This is calculated as follows:
Change in selling price = ((New selling price - Initial selling price) / Initial selling price) x 100%
Change in selling price = (($80 - $75) / $80) x 100%
Change in selling price = 6.25%
Hence, the selling price should be decreased by 6.25% to keep the amount available to the trader unchanged.
A trader altered this trade discount from 20% to 25%. By what percenta...
Increase by 6.67%