Chain Discounts— Complement Method pp SECTION 15-5

SECTION MBA, Section 15-5, Slide 2 of Section Objective Compute: final net price using the complement method

SECTION MBA, Section 15-5, Slide 3 of Key Words to Know net-price rate (p. 498) The percent of the price paid for an item, found by multiplying the complements of the chain discounts.

SECTION MBA, Section 15-5, Slide 4 of Net Price Rate = Product of Complements of Chain-Discount Rates Net Price = List Price × Net-Price Rate Formula

SECTION MBA, Section 15-5, Slide 5 of Restoring Vintage Vehicles p. 498 How do you find the final net price using the complement method?

SECTION MBA, Section 15-5, Slide 6 of Dell’s manufactures a riding mower, which is priced at $1,450. A new model is ready for production, so the model will be discontinued. Dell’s is offering a chain discount of 25 percent less 20 percent less 10 percent. What is the net price for the mower? Example 1

SECTION MBA, Section 15-5, Slide 7 of Find the complements. Complement of 25 percent: 100% – 25% = 75% Complement of 20 percent: 100% – 20% = 80% Complement of 10 percent: 100% – 10% = 90% Example 1 Answer: Step 1

SECTION MBA, Section 15-5, Slide 8 of Find the net-price rate. Product of Complements of Chain-Discount Rates 75% × 80% × 90% = 54% Example 1 Answer: Step 2

SECTION MBA, Section 15-5, Slide 9 of Find the net price. List Price × Net-Price Rate $1,450 × 54% = $783 Example 1 Answer: Step 3

SECTION MBA, Section 15-5, Slide 10 of Key Words to Know single equivalent discount (SED) (p. 499) One discount that is equal to a chain discount.

SECTION MBA, Section 15-5, Slide 11 of SED = Complement of Net-Price Rate Discount = List Price × SED Formula

SECTION MBA, Section 15-5, Slide 12 of In Example 1 the chain discount complements were 75 percent/80 percent/90 percent and the net-price rate was 54 percent. What is the SED? What is the discount? Example 2

SECTION MBA, Section 15-5, Slide 13 of Find the SED. Complement of the Net-Price Rate 100% – 54% = 46% (Note that 54% paid implies 46% off.) Example 2 Answer: Step 1

SECTION MBA, Section 15-5, Slide 14 of Find the discount. List Price × SED $1,450 × 46% = $667 Example 2 Answer: Step 2

SECTION MBA, Section 15-5, Slide 15 of Check: List Price – Discount = Net Price $1,450 – $667 = $783 (same as Example 1) Example 2 Answer: Step 3

SECTION MBA, Section 15-5, Slide 16 of Find the SED and the discount. List price: $ Chain discount: 40/25/15 Practice 1

SECTION MBA, Section 15-5, Slide 17 of SED: 61.75% Discount: $ Practice 1 Answer

Chain Discounts— Complement Method END OF SECTION 15-5