Discount Formula – Discount Rate & Discount Percentage Formulas

Discount Formula

Calculation of discount is one of most proficient mathematical skills that you can learn. You can apply it to the restaurants, shopping malls, and setting rates for your products. The actual way to calculate discount is multiplying original price with the discount percent rate.

To calculate the selling price, you just have to subtract the market price from discount value. Obviously, you can do this with the help of a calculator too but having a depth understanding of discount formulas can always make you proficient in understanding the concept.

Discount is a special condition of the price of a bond that is generally less in amount as compared to the face value. Discount is the actual difference between the listed prices and the selling prices and it can be written as given below.

\[\large Discount = List\;Price-Selling\;Price\]

\[Therefore\]

\[\large Selling\;Price=List\;Price-Discount\]

\[\large List\;Price=Selling\;Price+Discount\]

Discount Rate Formula

When you are purchasing different items from market then you can see most of the items have their price printed on the label attached to them. The price mentioned on the product is termed as the marked price, list price, or the advertised price.

Further, to make any product popular or to increase its sale as compared to other similar articles, product owner announces attractive discounts on special occasions. In this case, the price of a product will reduce significantly by a certain rate of percent.

\[\large Rate\;of\;Discount = Discount\;\% = \frac{Discount}{List\;Price}\times 100\]

This discount rate is always calculated on the market price of the article as mentioned by the product owner.

Discount Percentage Formula

Discount is the reduction in the actual price of a product as compared to the face value. It is used everywhere especially for products and clothes in malls, shops etc. And discount rate is given in percentage. With the discount percent formula, you can quickly check the rate of discount on market price and the final selling price too. Sometimes, they are so attractive that you could not stop yourself from buying a product.

\[\large Selling\;Price= List\;Price\left ( \frac{100-discount\;\%}{100} \right )\]

\[\large List\;Price= Selling\;Price\left (\frac{100}{100-discount\;\%} \right )\]

Discount Factor Formula

The Discount Factor is the calculation of the present net value of future cash flows that is further needed to check the expected losses or profits in the future. In other words, discount factor explains the net future value of an investment.

In order to do this, you need discount factor formula where you first check the periodic interest rates, secondly check the total number of payments to be made and assign variables for each value. For example, there is some Company giving 6 percent periodic interest, and interested in making total twelve payment during the year then discount factor would be 0.8357.

Why are discount formulas needed by the students?

This is a future-oriented mathematical technique and heavily relied on by the Companies. This formula is actually valuable because it gives you a clear picture of future expectations and you can decide in minutes either particular investment is fruitful for you or not.

Obviously, the calculation can be made with the help of a calculator or computer application but a depth understanding of formulas always takes you ahead of the crowd and makes you most suitable resource to solve complex mathematical problems.


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