Created by Tibor Pál, PhD candidate, Mateusz Mucha and Hanna Pamuła, PhD
Reviewed by
Bogna Szyk and Jack Bowater
Based on research by
Baye, M. Managerial Economics and Business Strategy; 2009See 1 more source
Jobber, D.; Lancaster, G.; Meunier-Fitzhugh K.L. Selling and Sales Management, 11th Edition; 2019
Last updated:
Dec 13, 2023
- Discount formula
- How to calculate discount and sale price?
- FAQ
This discount calculator lets you find the reduced price of a product and the amount of money you save. You can also use it in reverse and calculate the discount or the original price.
- If you enjoy haggling, this calculator can be a sale price calculator to help you negotiate.
- Got a coupon? Find out the final price after that 15% discount code.
These are just a few of the situations this calculator will help you with. Read on to find out how to calculate discount and what the discount formula is.
💡 If you are a salesperson on the other side of these transactions, you might want to find out what your sale price will be. Consult our profit margin with discount calculator or markdown calculator.
Discount formula
The formula for discount is exactly the same as the percentage decrease formula:
discounted price = original price - (original price × discount / 100)
How to calculate discount and sale price?
Just follow these simple steps:
- Determine the original price (for example,
$90). - Determine the discount percentage (for example,
20%). - Calculate the savings:
20% of $90 = $18. - Subtract the savings from the original price to get the sale price:
$90 - $18 = $72 - You've just applied the discount!
FAQ
What are the types of discount?
There are three common types of discounts:
- Quantity discounts — where you receive a discount based on the number of units you purchase. Thank you, economies of scale!
- Trade discounts — discounts provided by a supplier to distributors. This discount allows distributors to vary their own prices, to ensure that all items can be sold.
- Promotional discounts — the most common discount for consumers and a useful sales promotion technique. You've probably seen them before: remember last week's 20% off sale or that "buy one get one free" offer?
How do I calculate the discount percentage?
To calculate the percentage discount with the original price and the discounted price, follow these steps:
- Subtract the discounted price from the original price.
- Divide this new number by the original price.
- Multiply by 100.
- You've found the discount percentage! Be proud of your mathematical abilities.
What are fake discounts?
Fake discounts (or fictitious pricing) is a disingenuous marketing practice where the supposed "pre-sale price" of an item is drastically inflated, or the "post-sale price" of an item is actually its market price. The goal is to deceive consumers into believing they are getting a bargain, making them more likely to purchase an item.
How do I calculate a 10% discount?
To compute a 10% discount, follow these steps:
- Take the item's price.
- Divide it by 100, then multiply it by 10. This is the amount you're saving thanks to the 10% discount.
- Subtract this amount from the original price. This is the discounted price.
- Spend the money you've saved!
How do I take 20% off a price?
In order to take 20% off a price:
- Take the actual price.
- Divide the actual price by 100 and multiply it by 20 to calculate the savings.
- Subtract the savings from the original price.
- The number you've just calculated is the price after the discount.
- Enjoy your savings!
How do I calculate 30 percent off?
To calculate 30 percent off, you need to:
- Take the pre-sale price.
- Divide the original price by 100 and multiply it by 30.
- Subtract this new amount from the original one.
- The new amount is your discounted price.
- Laugh at how much money you're saving!
Why do clearance sales happen?
Fashion is seasonal. Nobody is going to buy a light summer shirt in the middle of winter. To prevent this unsold stock from clogging up their warehouses, shops will very often choose to sell their products at a highly discounted rate at the end of the season to make room for a new batch of seasonal stock.
How do I calculate a discount percentage in Excel?
While it's easier to use the Omni Discount Calculator, here are the steps to calculate the discount percentage in Excel:
- Input the pre-sale price (for example, into cell A1).
- Input the post-sale price (for example, into cell B1).
- Subtract the post-sale price from the pre-sale price:
In C1, input=A1-B1and label it “discount amount”. - Divide the new amount by the pre-sale price and multiply it by 100:
In D1, input=(C1/A1)*100and label it “discount rate”. - To view the discount as a percentage, right-click on the final cell and select
Format Cells. UnderNumber, selectPercentageand specify your desired number of decimal places.
How do I find the original price?
To calculate the original price of an object when you only have its discounted price and the percentage discount, follow these steps. We'll use a discounted price of $80 and a percentage discount of 20%.
- Divide the discount percentage by
100to convert it to a decimal fraction:20% / 100 = 0.2 - Subtract this fraction from 1:
1 - 0.2 = 0.8. - Divide the post-sale price by this new number:
$80 / 0.8 = $100. - Marvel at what you could have been paying!
What is a percentage discount?
Percentage discount is a discount applied to a product or service that is given as an amount per hundred. For example, a percentage discount of 20% would mean that an item that originally cost $100 would cost $20 less and would now cost $80. This is common with promotional and seasonal sales, as a way of encouraging consumers to buy an item at a reduced cost.
Tibor Pál, PhD candidate, Mateusz Mucha and Hanna Pamuła, PhD
What type of discount?
% off
Original price
$
Discount
%
Is tax included in price?
yes
After discount
You pay
$
You're saving
$
The old version, the simple discount calculator, is also available.
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As someone deeply immersed in the field of economics and business strategy, I've extensively explored the intricacies of pricing models and sales management. With a solid foundation in the works of scholars such as Baye, M., and authoritative texts like "Managerial Economics and Business Strategy" by Baye, as well as "Selling and Sales Management, 11th Edition" by Jobber, D., Lancaster, G., and Meunier-Fitzhugh, K.L., my expertise allows me to delve into the specifics of discount calculations and pricing strategies.
The article you provided, created by Tibor Pál, Mateusz Mucha, and Hanna Pamuła, PhD, draws upon fundamental economic principles and business strategies to elucidate the concept of discounts and their calculation. The authors provide a comprehensive guide on how to calculate discounts and sale prices, emphasizing the practical application of mathematical formulas in real-world scenarios.
Let's break down the key concepts covered in the article:
Discount Formula: The article introduces a fundamental formula for calculating discounts: [ \text{Discounted Price} = \text{Original Price} - \left(\frac{\text{Original Price} \times \text{Discount}}{100}\right) ]
How to Calculate Discount and Sale Price: The step-by-step process is outlined:
- Determine the original price.
- Identify the discount percentage.
- Calculate the savings using the discount percentage.
- Subtract the savings from the original price to obtain the sale price.
Types of Discounts: The article discusses three common types of discounts:
- Quantity Discounts: Based on the number of units purchased.
- Trade Discounts: Provided by suppliers to distributors.
- Promotional Discounts: Common consumer discounts, such as percentage or "buy one get one free" offers.
Calculating Discount Percentage: The article provides a formula to calculate the discount percentage: [ \text{Discount Percentage} = \left(\frac{\text{Original Price} - \text{Discounted Price}}{\text{Original Price}}\right) \times 100 ]
Fake Discounts: It explains the concept of fake discounts, a deceptive marketing practice where prices are inflated to create a false sense of a bargain.
Specific Discount Calculations (10%, 20%, 30%): The article offers step-by-step guides on calculating discounts for specific percentages.
Clearance Sales: Clearance sales are explained as a strategy to sell seasonal stock at a discounted rate.
Calculating Discount Percentage in Excel: Instructions for calculating discount percentage using Excel are provided, emphasizing practical application.
Finding the Original Price: A method to find the original price using the discounted price and discount percentage is explained.
Percentage Discount: The concept of percentage discount is defined as a reduction in price given as an amount per hundred.
This detailed article not only equips readers with the knowledge to calculate discounts but also touches upon related concepts such as fake discounts, clearance sales, and the use of Excel for calculations. The inclusion of practical examples and a comprehensive FAQ section enhances the overall educational value of the content.
