Videos: Trade and Cash Discounts
1. A company makes snowboards that retail at $1250. The company offers chained discounts of 30% and 5% to its retailers.
- Calculate the price a retailer would pay for the snowboards.
- What single discount (single equivalent discount) is equivalent to these two discounts?
- What is the percent markup of the retailers?
- Due to a slowdown in sales the manufacturer would like to increase the total discount given to its retailers to 40%. What additional chained discount must they offer?
2. On November 3, the Springfield power plant receives 10 fuel rods. The rods have a list price of $20,000 each with discounts of 5% and 10% and payment terms of 2/10, 1/15 net 30.
- What is the last day the invoice can be paid? How much must be paid?
- What is the last day the 2% discount may be taken? How much must be paid?
- If the supplier offers cash discounts on partial payments and $100,000 is paid after 5 days and another $50,000 15 days after the invoice date. How much will Springfield owe at the end of 30 days?
3. An invoice for $10,000 has payment terms 3/10, 2/20, n/45. Discounts are allowed for partial payments. The company made a payment of $3,000 9 days after the date of invoice, and a second payment 18 days after the date of the invoice that reduced the balance owing to $2,000. What is size of the second payment?
Chapter Attribution
Video chapter in Business Mathematics by Chris Kellman, Leslie Major, Don Mallory, Frank Gruen, and Amy Goldlist shared under a CC BY-NC license.
