1. Trade Discount— Complement Method pp. 489-491 SECTION 15-2

2. SECTION MBA, Section 15-2, Slide 2 of 16 15-2 Section Objective Calculate: net price using the complement method

3. SECTION MBA, Section 15-2, Slide 3 of 16 15-2 Key Words to Know complement method (p. 489) A way to find the net price of a discounted item by subtracting the discount rate from 100 percent.

4. SECTION MBA, Section 15-2, Slide 4 of 16 15-2 Net Price = List Price × Complement of Trade-Discount Rate Formula

5. SECTION MBA, Section 15-2, Slide 5 of 16 15-2 Restoring Vintage Vehicles p. 489 What is the complement of 35 percent?

6. SECTION MBA, Section 15-2, Slide 6 of 16 15-2 The list price of an electronic ignition module in the wholesaler’s catalog is $845. Repair shops receive a 40 percent trade discount. What is the net price of the module? Example 1

7. SECTION MBA, Section 15-2, Slide 7 of 16 15-2 Find the complement of trade-discount rate. 100% – 40% = 60% Example 1 Answer: Step 1

8. SECTION MBA, Section 15-2, Slide 8 of 16 15-2 Find the net price. List Price × Complement of Trade-Discount Rate $845.00 × 60% = $507 Example 1 Answer: Step 2

9. SECTION MBA, Section 15-2, Slide 9 of 16 15-2 Net Price = List Price × Percent Price Formula

10. SECTION MBA, Section 15-2, Slide 10 of 16 15-2 Shelita Reeves runs Affiliated Lumber and buys paint from Dap Corporation. Dap grants a 40 percent trade-discount rate to all retail outlets. How much does Reeves pay for a case of white ceiling paint if it retails for $132. Example 2

11. SECTION MBA, Section 15-2, Slide 11 of 16 15-2 Step: Find the net price List Price = List Price × Percent Price $132.00 × (100% − 40%) $132.00 × 60% = $79.20 Example 2 Answer

12. SECTION MBA, Section 15-2, Slide 12 of 16 15-2 Partyland receives a 23 percent trade discount. What will Partyland pay for the following items? Paper plates @ $1.57 Plastic cups @ $1.09 Plastic cutlery @ $0.99 Practice 1

13. SECTION MBA, Section 15-2, Slide 13 of 16 15-2 Paper plates: $1.21 Plastic cups: $0.84 Plastic cutlery: $0.76 Practice 1 Answer

14. SECTION MBA, Section 15-2, Slide 14 of 16 15-2 Find the net price. List price: $295.79 Trade-discount rate: 32% Practice 2

15. SECTION MBA, Section 15-2, Slide 15 of 16 15-2 $201.14 Practice 2 Answer

16. Trade Discount— Complement Method END OF SECTION 15-2