Understanding Trade Discount
Trade discount is a reduction in the listed price of goods or services, often offered by sellers to buyers, typically based on the volume of purchase. In this case, we will calculate the trade discount for selling 100 books at a unit price of ` 240, with an 8% trade discount.
Calculating the Total Price Before Discount
- Total number of books sold: 100
- Price per book: ` 240
Formula:
Total Price = Number of Books × Price per Book
- Total Price = 100 × 240 = ` 24,000
Calculating the Trade Discount
- Trade discount rate: 8%
Formula:
Trade Discount = Total Price × Trade Discount Rate
- Trade Discount = 24,000 × (8 / 100) = ` 1,920
Final Amount After Trade Discount
To find out how much the buyer pays after the trade discount:
- Amount After Discount = Total Price - Trade Discount
- Amount After Discount = 24,000 - 1,920 = ` 22,080
Summary
- Total Price of 100 books: ` 24,000
- Trade Discount (8%): ` 1,920
- Final Amount Payable: ` 22,080
In conclusion, the trade discount for selling 100 books at ` 240 each with an 8% discount is ` 1,920. Understanding trade discounts helps both sellers and buyers in negotiating better deals and managing costs effectively.