Chain Discounts— Complement Method pp. 498-501 SECTION SECTION 15-5 15-5
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Chain Discounts—Complement Method pp. 498-501SECTION 15-5SECTION 15-5
SECTION
MBA, Section 15-5, Slide 2 of 18
15-5
Section ObjectiveSection ObjectiveCompute:
• final net price using the complement method
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MBA, Section 15-5, Slide 3 of 18
15-5
Key Words to KnowKey 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 18
15-5
Net Price Rate = Product of Complements of Chain-Discount RatesNet Price = List Price × Net-Price Rate
FormulaFormula
SECTION
MBA, Section 15-5, Slide 5 of 18
15-5
Restoring Vintage Vehicles p. 498Restoring Vintage Vehicles p. 498
How do you find the final net price using the complement method?
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MBA, Section 15-5, Slide 6 of 18
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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 1Example 1
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MBA, Section 15-5, Slide 7 of 18
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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: Example 1 Answer: Step 1Step 1
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MBA, Section 15-5, Slide 8 of 18
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Find the net-price rate.Product of Complements of Chain-Discount Rates
75% × 80% × 90% = 54%
Example 1 Answer: Example 1 Answer: Step 2Step 2
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MBA, Section 15-5, Slide 9 of 18
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Find the net price.List Price × Net-Price Rate$1,450 × 54% = $783
Example 1 Answer: Example 1 Answer: Step 3Step 3
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MBA, Section 15-5, Slide 10 of 18
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Key Words to KnowKey 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 18
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SED = Complement of Net-Price RateDiscount = List Price × SED
FormulaFormula
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MBA, Section 15-5, Slide 12 of 18
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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 2Example 2
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MBA, Section 15-5, Slide 13 of 18
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Find the SED.Complement of the Net-Price Rate100% – 54% = 46% (Note that 54% paid implies 46% off.)
Example 2 Answer: Example 2 Answer: Step 1Step 1
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MBA, Section 15-5, Slide 14 of 18
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Find the discount.List Price × SED$1,450 × 46% = $667
Example 2 Answer: Example 2 Answer: Step 2Step 2
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MBA, Section 15-5, Slide 15 of 18
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Check: List Price – Discount = Net Price$1,450 – $667 = $783 (same as Example 1)
Example 2 Answer: Example 2 Answer: Step 3Step 3
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MBA, Section 15-5, Slide 16 of 18
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Find the SED and the discount.List price: $398.55Chain discount: 40/25/15
Practice 1Practice 1
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MBA, Section 15-5, Slide 17 of 18
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SED: 61.75%Discount: $246.10
Practice 1 AnswerPractice 1 Answer
Chain Discounts—Complement Method
END OF SECTION 15-5END OF SECTION 15-5
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