Page 32 - LESSON 2: DISCOUNTS AND COMMISSIONS

2. = −
= ₱2,600 − ₱780
= ₱1,820

Notice that the two successive rates of 20% and 10% are less than the single rate of 30%.
In the other words, Nilda would have paid less had she been offered a single 30% discount

instead of a discount series of 20% and 10%.

Example 2.

The list price of a Portable External Hard Drive is 1,500. If this price is subject to

discounts of 15% and 5%, what is the net price?

Solution:

1. = ×

= ₱1,500 × 0.16
= ₱225

2. = −
= ₱1,500 − 225

= ₱1,275
3. = ×

= ₱1,275 × 0.06
= ₱63.75

4. = −
= ₱1,275 − ₱63.75

= ₱1,211.25

F. CASH DISCOUNTS
One of the big problems of business today is the collection of unpaid accounts. With the

widespread use of credit, many buyers tend to overbuy. We often hear of firms reprocessing some
appliances sold on credit simply because of the inability of the buyer to pay. For many firms, it is

a common practice to provide contingencies for bad debts.

Thus, we see that it is important for the seller to be paid by the buyer as soon as possible.

To encourage prompt payment, the seller may offer a cash discount of say 1, 2, 3, or 4%

Page | 10 BUSINESS MATHEMATICS: MODULE 2