How do I Calculate a List Price Discount?

Discounts are often expressed as percents.

Manufacturers and retailers will publish a list of their products and give a price for the item in the catalog. Many retailers, however, offer discounts from the list prices for companies or groups that purchase a large number of items. For example, a manufacturer might offer reduced prices for groups that buy at least $200,000 of merchandise. To calculate the size of a list-price discount, you need to know the list price and the sales price.

Instructions

1. Subtract the actual sale price from the list price. For example, if the list price equals $1,000 but you pay $800, you would subtract $800 from $1,000 to get $200.

2. Divide the result from Step 1 by the list price to find the list price discount expressed as a decimal. In this example, you would divide $200 by $1,000 to get 0.2.

3. Multiply the result from Step 2 by 100 to convert from a decimal to a percentage. Finishing the example, you would multiply 0.2 by 100 to get 20 percent.

References

• Principles of Accounting: Chapter 5
• Teachers Choice: Discount