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Question

Difficulty: HardDiscounts and Sale Prices

Calculate the unknown value in the following financial scenario.

Answer:A facilities manager is purchasing a bulk supply of LED lighting fixtures from a wholesale distributor. The distributor applies a 15%15\% volume discount to the regular total price. Because the manager pays the invoice within 10 days, an additional 5%5\% early-payment discount is applied to the already reduced price. If the final price of the fixtures before tax is $3,230\$3,230, the regular total price of the order was $【4000】\$【4000】.

Answer

$4,000
To find the original price after successive discounts, you must work backwards from the final price. First, divide the final price by the complement of the second discount (100%−5%=95%100\% - 5\% = 95\%, or 0.950.95) to find the intermediate price: $3,230÷0.95=$3,400\$3,230 \div 0.95 = \$3,400. Next, divide this intermediate price by the complement of the first discount (100%−15%=85%100\% - 15\% = 85\%, or 0.850.85) to find the regular total price: $3,400÷0.85=$4,000\$3,400 \div 0.85 = \$4,000.

Step-by-Step Solution

1
Calculate the intermediate price before the 5% early-payment discount.
$3,230÷0.95=$3,400\$3,230 \div 0.95 = \$3,400
The final price of $3,230\$3,230 represents 95%95\% (100%−5%100\% - 5\%) of the price after the initial volume discount.
2
Calculate the original regular total price before the 15% volume discount.
$3,400÷0.85=$4,000\$3,400 \div 0.85 = \$4,000
The intermediate price of $3,400\$3,400 represents 85%85\% (100%−15%100\% - 15\%) of the original regular total price.

Key Concept

Calculating original prices by reversing successive discounts using division.
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Topics

Discounts and Sale Prices

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