1. Chain Discounts— Complement Method pp. 498-501 SECTION 15-5

2. SECTION MBA, Section 15-5, Slide 2 of 18 15-5 Section Objective Compute: final net price using the complement method

3. SECTION MBA, Section 15-5, Slide 3 of 18 15-5 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.

4. SECTION MBA, Section 15-5, Slide 4 of 18 15-5 Net Price Rate = Product of Complements of Chain-Discount Rates Net Price = List Price × Net-Price Rate Formula

5. SECTION MBA, Section 15-5, Slide 5 of 18 15-5 Restoring Vintage Vehicles p. 498 How do you find the final net price using the complement method?

6. SECTION MBA, Section 15-5, Slide 6 of 18 15-5 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

7. SECTION MBA, Section 15-5, Slide 7 of 18 15-5 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

8. SECTION MBA, Section 15-5, Slide 8 of 18 15-5 Find the net-price rate. Product of Complements of Chain-Discount Rates 75% × 80% × 90% = 54% Example 1 Answer: Step 2

9. SECTION MBA, Section 15-5, Slide 9 of 18 15-5 Find the net price. List Price × Net-Price Rate $1,450 × 54% = $783 Example 1 Answer: Step 3

10. SECTION MBA, Section 15-5, Slide 10 of 18 15-5 Key Words to Know single equivalent discount (SED) (p. 499) One discount that is equal to a chain discount.

11. SECTION MBA, Section 15-5, Slide 11 of 18 15-5 SED = Complement of Net-Price Rate Discount = List Price × SED Formula

12. SECTION MBA, Section 15-5, Slide 12 of 18 15-5 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

13. SECTION MBA, Section 15-5, Slide 13 of 18 15-5 Find the SED. Complement of the Net-Price Rate 100% – 54% = 46% (Note that 54% paid implies 46% off.) Example 2 Answer: Step 1

14. SECTION MBA, Section 15-5, Slide 14 of 18 15-5 Find the discount. List Price × SED $1,450 × 46% = $667 Example 2 Answer: Step 2

15. SECTION MBA, Section 15-5, Slide 15 of 18 15-5 Check: List Price – Discount = Net Price $1,450 – $667 = $783 (same as Example 1) Example 2 Answer: Step 3

16. SECTION MBA, Section 15-5, Slide 16 of 18 15-5 Find the SED and the discount. List price: $398.55 Chain discount: 40/25/15 Practice 1

17. SECTION MBA, Section 15-5, Slide 17 of 18 15-5 SED: 61.75% Discount: $246.10 Practice 1 Answer

18. Chain Discounts— Complement Method END OF SECTION 15-5