Complete the following table:
Note: Do not round intermediate calculations. Round your final answers to the nearest cent.
Item List Price chain discount net price trade discount
Sony digital camera $320 6/4/3  ÂÂ
The Correct Answer and Explanation is :
To calculate the net price and trade discount for the Sony digital camera, we will need to follow these steps:
Step 1: Understand the Chain Discount
A chain discount like 6/4/3 means that there are three consecutive discounts applied to the list price. Specifically, it means:
- A 6% discount on the list price
- A 4% discount on the price after the first discount
- A 3% discount on the price after the second discount
Step 2: Calculate the Net Price
- Initial List Price: $320
- First Discount (6%):
[ 320 \times 6\% = 320 \times 0.06 = 19.20 ]
New price after the first discount:
[ 320 – 19.20 = 300.80 ] - Second Discount (4%) on the new price ($300.80):
[ 300.80 \times 4\% = 300.80 \times 0.04 = 12.03 ]
New price after the second discount:
[ 300.80 – 12.03 = 288.77 ] - Third Discount (3%) on the new price ($288.77):
[ 288.77 \times 3\% = 288.77 \times 0.03 = 8.66 ]
New price after the third discount:
[ 288.77 – 8.66 = 280.11 ]
So, the net price is $280.11.
Step 3: Calculate the Total Trade Discount
The total trade discount is the sum of all individual discounts.
- First, we calculate the total discount as a percentage:
[
\text{Total Chain Discount} = 6\% + 4\% + 3\% = 13\%
] - Now, calculate the total trade discount amount:
[
320 \times 13\% = 320 \times 0.13 = 41.60
]
So, the total trade discount is $41.60.
Final Answers:
- Net Price: $280.11
- Trade Discount: $41.60
Explanation:
The net price is the amount the buyer will actually pay after applying all the successive discounts in the chain. Each discount is calculated on the new reduced price from the previous step. In contrast, the trade discount represents the total percentage of the price reduced due to the chain discounts, helping to calculate the final price reductions.