chain discounts— complement method
DESCRIPTION
SECTION 15-5. pp. 498-501. Chain Discounts— Complement Method. Compute: final net price using the complement method. Section Objective. Key Words to Know. net-price rate (p. 498) The percent of the price paid for an item, found by multiplying the complements of the chain discounts. - PowerPoint PPT PresentationTRANSCRIPT
Chain Discounts—Complement Method
pp. 498-501SECTION 15-5SECTION 15-5
SECTION
MBA, Section 15-5, Slide 2 of 18
15-5
Section ObjectiveSection ObjectiveCompute:
• final net price using the complement method
SECTION
MBA, Section 15-5, Slide 3 of 18
15-5
Key Words to KnowKey Words to Know
net-price rate (p. 498)
The percent of the price paid for an item, found by multiplying the complements of the chain discounts.
SECTION
MBA, Section 15-5, Slide 4 of 18
15-5
Net Price Rate = Product of Complements of Chain-Discount Rates
Net Price = List Price × Net-Price Rate
FormulaFormula
SECTION
MBA, Section 15-5, Slide 5 of 18
15-5
Restoring Vintage Vehicles p. 498Restoring Vintage Vehicles p. 498
How do you find the final net price using the complement method?
SECTION
MBA, Section 15-5, Slide 6 of 18
15-5
Dell’s manufactures a riding mower, which is priced at $1,450. A new model is ready for production, so the model will be discontinued.
Dell’s is offering a chain discount of 25 percent less 20 percent less 10 percent.
What is the net price for the mower?
Example 1Example 1
SECTION
MBA, Section 15-5, Slide 7 of 18
15-5
Find the complements.
Complement of 25 percent: 100% – 25% = 75%
Complement of 20 percent: 100% – 20% = 80%
Complement of 10 percent: 100% – 10% = 90%
Example 1 Answer: Example 1 Answer: Step 1Step 1
SECTION
MBA, Section 15-5, Slide 8 of 18
15-5
Find the net-price rate.
Product of Complements of Chain-Discount Rates
75% × 80% × 90% = 54%
Example 1 Answer: Example 1 Answer: Step 2Step 2
SECTION
MBA, Section 15-5, Slide 9 of 18
15-5
Find the net price.
List Price × Net-Price Rate
$1,450 × 54% = $783
Example 1 Answer: Example 1 Answer: Step 3Step 3
SECTION
MBA, Section 15-5, Slide 10 of 18
15-5
Key Words to KnowKey Words to Know
single equivalent discount (SED) (p. 499)
One discount that is equal to a chain discount.
SECTION
MBA, Section 15-5, Slide 11 of 18
15-5
SED = Complement of Net-Price Rate
Discount = List Price × SED
FormulaFormula
SECTION
MBA, Section 15-5, Slide 12 of 18
15-5
In Example 1 the chain discount complements were 75 percent/80 percent/90 percent and the net-price rate was 54 percent.
What is the SED?
What is the discount?
Example 2Example 2
SECTION
MBA, Section 15-5, Slide 13 of 18
15-5
Find the SED.
Complement of the Net-Price Rate
100% – 54% = 46%
(Note that 54% paid implies 46% off.)
Example 2 Answer: Example 2 Answer: Step 1Step 1
SECTION
MBA, Section 15-5, Slide 14 of 18
15-5
Find the discount.
List Price × SED
$1,450 × 46% = $667
Example 2 Answer: Example 2 Answer: Step 2Step 2
SECTION
MBA, Section 15-5, Slide 15 of 18
15-5
Check: List Price – Discount = Net Price
$1,450 – $667 = $783 (same as Example 1)
Example 2 Answer: Example 2 Answer: Step 3Step 3
SECTION
MBA, Section 15-5, Slide 16 of 18
15-5
Find the SED and the discount.
List price: $398.55
Chain discount: 40/25/15
Practice 1Practice 1
SECTION
MBA, Section 15-5, Slide 17 of 18
15-5
SED: 61.75%
Discount: $246.10
Practice 1 AnswerPractice 1 Answer
Chain Discounts—Complement Method
END OF SECTION 15-5END OF SECTION 15-5