Last updated on September 6, 2025
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.
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.
We can calculate the amount you can save from a discount using the different cases mentioned below:
When the discount percentage is known, we use the following step-by-step calculation:
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.
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
Calculating the percentage difference helps students save money without overspending. We will now look into a few tips and tricks:
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:
Calculating discounts has numerous applications in real-world situations. Let’s take a look at them:
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.
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
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.
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.
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.
To calculate the discount:
Discount amount = Original price × Discount percentage (decimal)
$500 × 0.50 = $250
Therefore, the discount amount is $250.
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.
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.
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.
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.
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
: She believes math is like music—once you understand the rhythm, everything just flows!