Page 31 - LESSON 2: DISCOUNTS AND COMMISSIONS

One might wonder why some business firms offer discount series instead of the simpler
single trade discounts. The reasons are varied: to reduce inventory, to promote a product line, or

simply to attract more customers.

We have to remember, however, that a discount series of 20% and 10% is not the same

as 30%. The two successive rates of 20% and 10% are less than the single rate of 30%. A discount M2_L2
series of 20% and 10% means that a reduction of 20% is to be taken on the original list price and

10% is to be taken on the balance that remains after the first discount is subtracted from the list
price.

Here are some examples to illustrate how to compute for discount series.

Example 1.

Nilda Sadorra purchased a computer keyboard at the list price of ₱2,600, less 20%, and
10%. How much must Nilda pay for the computer keyboard?

Solution:

1. = ×
= ₱2,600 × 0.20

= ₱520
2. = −

= ₱2,600 − ₱520
= ₱2.080

3. = ×
= ₱2,080 × 0.10

= ₱208

4. = −
= ₱2,080 − ₱208
= ₱1,872

If Nida purchased the same computer keyboard less 30%, how much should she pay?

1. = ×

= ₱2,600 × 0.30
= ₱780

LESSON 2: DISCOUNTS AND COMMISSIONS 9 | P a g e