 Solving Trade Discount Word Problems There is an alternative method for solving trade discount word problems that requires you to memorize only one equation rather than the multiple equations shown in most text presentations. The beauty of this algorithm is that it can solve for any of the three percentages or three dollar values. The following formula will be used for every problem. First price minus trade discount equals net cost. Acronyms will be substituted to create this form of the same formula. LP minus TD equals NC. This method has user friendly proportions. Percentages will be placed on top of each term in the equation and monetary values will be placed on the bottom. Remember that the net cost equivalent percentage will always go over the net cost and the single discount equivalent will go over the trade discount. The list price is the base, so 100% will always be above it. Do not round any percentages, unless the directions tell you to. Round the monetary values to the nearest cent, if necessary. Example 1. The net cost of an item is $500 and the trade discount series is $20 over $10. Find the list price. Step 1. Find the net cost equivalent by multiplying the complements, in decimal form, of the trade discount rates in the series 20 over 10. Step 2. Find the single discount equivalent by subtracting the net cost equivalent from 100%. Now set up the equation. Insert the given monetary value, NC equals $500, and the rates into their proper positions. For ease of calculation, do not include the percent symbols with the rates. If the answer is a rate, you must include the percent symbol in the answer. Allow for wide gaps between the values, in case the rates are lengthy numbers. The three proportions do not include the formula in the middle. Always pull away the proportion that includes the value you are solving for, and the proportion that has two known values. Use the acronym instead of just a blank for what you are solving for. Now simply cross multiply and divide. Round the monetary values to the nearest cent, and the rates to the nearest tenth of a percent. Here, LP equals $694.44. Example 2. Find the trade discount if the net cost is $250, and the trade discount series is $5 over $15. Now set up the equation. Again pull down the proportion with the value you are solving for, and the proportion with the two known numbers. Cross multiply and divide to find TD, and round to the nearest cent if necessary. TD equals $59.60. This last example we will solve for the trade discount rate. Two of the monetary values will be given, and the third value can be found by addition or subtraction, depending upon what is given. Example 3. Find the trade discount rate if the net cost is $85, and the trade discount is $19. Hint. Find the list price by adding the net cost and the trade discount. LP minus TD equals NC. Now substitute the given values into the equation. LP equals $104. Now set up the equation. LP minus TD equals NC. TDR equals 18.3%. Congratulations! You have completed solving trade discount word problems.