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Discount & Tax

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Video-Lesson Transcript

In this lesson, we will discuss percent discount and tax.

Percent Discount

First, let’s discuss percent discount.

Percent discount is how much you’re going to receive off of a price.

For example, a TV had an original price of \$1,000 which was put on sale at 20\%.

Some are confused with 20\%. This is not a value, it’s a ratio or a fraction.

So here we should find out what is 20\% of \$1,000 then subtract that.

Let’s compute it

1,000 \times 0.20

Just a side note: 20\% = 0.20

So, 1,000 \times 0.20 = 200.00

200 is the discount. This is what we should take off of the price.

In the example, since the TV was originally priced at \$1,000, we should subtract the discount of \$200.

1,000 - 200 = 800

The discounted price of the TV is \$800.

Discount & Tax

Again, the 20\% is not the actual price. We should find out what is 20\% of \$1,000 then subtract it from the original price of \$1,000 to get the discounted price.

Tax

Now, let’s move on to tax.

Tax is added to a price.

For example, a different TV is priced at \$1,000 with a tax of 6\%.

So we have to find out what is 6\% of \$1,000. Then add it to get the final price.

Side note: 6\% = 0.06

Let’s compute:

1,000 \times 0.06 = 60.00

So now the final price is computed as the original price of the TV plus the tax.

1,000 + 60 = 1,060

The total cost is \$1,060.

Discount & Tax 2

So for tax, find the amount then add it on the original price.

Discount and Tax

Let’s have more complicated problems involving discount and tax.

A very important rule in discount and tax is to:
Always do discount first then do tax of the discounted price.

For example, we have a TV priced at \$1,000, discounted for 20\% and should be taxed at 6\%.

To compute, let’s get the discount first.

1,000 \times 0.20 = 200.00

Then subtract to get the discounted price

1,000 - 200 = 800

The \$800 is the sale price/discounted price.

Then let’s get the tax

800 \times 0.06 = 48

The tax is \$48

So to get the final price we have to add the discounted price to the tax.

800 + 48 = 848

Our total cost now is \$848

Discount & Tax 3

Let’s have a quick recap.

We have a TV priced at \$1,000, discounted for 20\% and should be taxed at 6\%.

We got the discount of \$200 which was subtracted to the original price of \$1,000, the answer is \$800.
\$800 is the price we’re paying for the TV. The same price we’re going to use to get the tax.

The tax was computed by \$800 multiplied by the tax 6\% where we got the tax of \$48.

So the total cost is computed by \$800 for the TV plus the tax of \$48.

So the total cost of the TV is \$848.