15.1 Trade Discounts Objective: To understand how to compute the trade discount and the net price. Trade Discount = List Price ∗ Trade Discount Rate Net Price = List Price − Trade Discount List Price: the price you sell the item. : catalog price Net Price: the price you pay for the item. Ex: List Price: $14.89 Trade Discount rate: 20% Find the trade discount and the net price. Trade Discount = 14.89 ∗ 20% = $2.98 Net Price = 14.89 − 2.98 = $11.91 Ex: Murray Plumbing receives an 18 percent trade discount from their wholesale supply company. The list price on an item that Murray needs to purchase is $145.79 Find the net price. Net Price = List Price − (List Price ∗ Trade Discount Rate ) Net Price = 145.79 − (145.79 ∗ 18% ) = $119.55 Hw #1 Pg. 487 # 1-­‐14