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232 LearnersLast updated on September 6, 2025
Calculating Discounts
Imagine going shopping and seeing a 70% off sign, but not knowing how much you will actually save. Understanding discounts helps you shop smartly without overspending. Calculating discounts helps us find out how much we can save on a product after the discount is applied. Let’s now learn about calculating discounts and their applications.
What are Discounts in Math?
A discount is defined as a decrease in the marked price of goods or services based on the price offered by shopkeepers to customers. The marked price (listed price) is the price set by shopkeepers for customers, which should be equal to or less than the MRP.
The Maximum Retail Price (MRP) of a product is given by the manufacturer. The discount is often expressed as a percentage, representing a fraction of 100. Discount offers are common because they are a technique to boost sales. We use terms like reduction or off to indicate discounts.
The formula for Calculating Discount
We can calculate the amount you can save from a discount using the different cases mentioned below:
- If the marked price and selling price are provided, we use the formula:
Discount = Marked Price - Selling Price
- To calculate the discount percentage:
Discount (%) = (Discount/Marked Price) × 100
When the discount percentage is known, we use the following step-by-step calculation:
- To calculate the selling price, we first divide the discount percentage by 100 to convert it into a decimal.
- We multiply the marked price by the decimal to obtain the discount.
- As a final step, we find the difference between marked price and discount to obtain the selling price.
For example: Assume a product’s marked price is $2000, and it has a 20% discount. Determine the price at which the customer may purchase it.
Calculating the discount percentage as a decimal = 20/100 = 0.2
Discount amount = 0.2 × 2000 = $400.
Selling price = Marked price - Discount($)
Selling price = $2000 – $400 = $1600.
So, the product can be purchased for $1600.
Types of Discount
Discounts are often offered by the distributors to customers to increase their sales. There are different types such as trade discounts, quantity discounts, and promotional discounts.
Trade Discount: This type of discount is offered by the distributor to the retailer rather than the customer. It is given to retailers to help them sell the distributor’s products.
Promotional Discount: These discounts are offered when the distributor needs to clear their stock or promote their new product. For example: “Buy 1, Get 2 Free”.
Quantity Discount: These discounts are given to attract more customers when they purchase products in large quantities.
Discount Rate: If the lowered price is given as a percentage, it is known as the discount percentage or discount rate. We can calculate the discount rate using the formula:
Discount (%) = (List price - Selling Price) / List Price × 100 [OR]
Discount (%) = (Discount/List Price) × 100
Tips and Tricks for Calculating Discounts
Calculating the percentage difference helps students save money without overspending. We will now look into a few tips and tricks:
- Convert the percentage discounts into decimal form. For example: 50% = 0.5.
- Learn to do the quick mental math for 10%, 20%, and 50% discounts.
- Subtract discount from marked price to find final price.
Common Mistakes and How to Avoid Them in Calculating Discounts
Students tend to make mistakes when calculating discounts. This can be avoided by understanding the errors and their proper solutions. Let’s look at a few common mistakes and their solutions:
Mistake 1
Not applying a Discount to the Marked Price
They might skip the step where the discount should be applied to the marked price. Keep in mind that the discount must be applied to the marked price and not the final price.
For example,
Suppose the marked price is given as $300, and it has a 10% discount, we need to calculate it from the marked price and not from the discounted price.
Mistake 2
Forgetting to Calculate the Amount to be Deducted
They mistakenly subtract the discount from the original price instead of calculating the amount to be subtracted.
Always ensure you determine the discount amount (multiply the marked price by the decimal discount), then subtract the resultant value from the marked price.
For example:
If a $500 product is displayed with a 20% discount:
We calculate the discount by multiplying $500 by 0.20, which equals $100.
Selling price = $500 – $100 = $400.
Mistake 3
Using the Incorrect Formula
Some students may use incorrect formulas while calculating the selling price or discounts.
To avoid errors, the correct formula should be used to calculate the selling price:
Selling Price = Marked Price × (1 – Discount Percentage)
Mistake 4
Skipping the Conversion of the Discount Percentage to Decimal
Students might forget to convert the discount percentage to decimal. Ensure that the first step of the calculation is decimal conversion. We need to divide the discount percentage by 100 to express it in the decimal form before multiplying it by the marked price.
For example: If the given discount is 50% discount, use 0.5 (not 50).
Mistake 5
Confusing the discount amount with the final price
The discount amount with the final price can be a little confusing for the students. Understand the definitions of the discount amount (the money you could save) and the final price (the amount the customer should pay) without confusing them.
Real-World Applications of Calculating Discounts
Calculating discounts has numerous applications in real-world situations. Let’s take a look at them:
- Children can apply discounts to save money when buying clothes, books, or chocolates. It allows them to save money and buy more products by spending less capital.
- Companies make use of discounts as a technique to increase their sales by attracting customers (like festival season sales). Discounts attract new customers, and they can buy more items than they plan to purchase.
- Students can avail of discounts on public transportation, making travel more affordable. By calculating discounts, they can travel by paying less fare than the other passengers.
- Discounts are provided by different sectors like healthcare for senior citizens and poor families. These price reductions help people to access essential services at low cost.
- Events and parties often provide early bird discounts to attract more people to attend.
Solved Examples of Calculating Discounts
Problem 1
If you want to buy a shirt with a 30% discount that was originally priced at $500, what is the discount amount and the selling price after the discount?
$350 is the selling price and the discount is $150.
Explanation
We calculate the discount amount:
Discount amount = Original price × Discount percentage (decimal)
Substituting the given values:
$500 × 0.3 = $150
Calculating the selling price:
Selling price = Original price – Discount amount
$500 – $150 = $350
Therefore, the selling price = $350
Problem 2
If a bookstore offers a 20% discount on a book that costs $100. What will be the discount amount and the selling price after the discount?
The discount amount is $20 and the selling price is $80.
Explanation
We use the formula for the discount amount:
Discount amount = Original price × Discount Percentage
Discount amount = $100 × 0.2 = $20
Calculating the Selling Price:
Selling price = Original price – Discount amount
Selling price = $100 – $20 = $80
Therefore, the discount amount is $20 and the selling price is $80.
Problem 3
If Erica’s family buys a new carpet priced at $500 which has a discount of 50%. Calculate the discount amount.
The discount amount is $250.
Explanation
To calculate the discount:
Discount amount = Original price × Discount percentage (decimal)
$500 × 0.50 = $250
Therefore, the discount amount is $250.
Problem 4
If a customer buys a computer at $1200, during a sale with a 30% discount, what was the original price?
The original price before the discount was $1714.29.
Explanation
Assume x is the original price before the discount.
Since the product has a 30% discount, the customer should pay 70% of the original price:
Sale Price = 70% of Original Price
1200 = 0.7x
Now, solve for x:
x = 1200/0.7
x = 1714.29
Therefore, the original price before the discount was $1714.29.
Problem 5
If an item originally costs $700. If it has a 40% discount, then another 10%, what would be the price calculated?
The final price after the discounts was $378.
Explanation
For 40% discount: 40/100 × $700 = $280
Price after first discount:
$700 – $280 = $420
For the additional 10% discount: 10/100 × $420 = $42
Price after second discount:
$420 – $42 = $378
We get the final price after the discounts as $378.
FAQs on Calculating Discounts
1.What is the formula to calculate the percentage discount?
2.What should we do if more than one discount is applied to a product?
3.Give the formula to calculate the percentage we save after a discount.
4.What does a 50% discount mean?
5.Can we add discount percentages together?
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Dr. Sarita Ghanshyam Tiwari
About the Author
Dr. Sarita Tiwari is a passionate educator specializing in Commercial Math, Vedic Math, and Abacus, with a mission to make numbers magical for young learners. With 8+ years of teaching experience and a Ph.D. in Business Economics, she blends academic rigo
Fun Fact
: She believes math is like music—once you understand the rhythm, everything just flows!
