FINANCIAL ACCOUNTING
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Author: Libby
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![### Trade Discount Rate Calculation
**Problem:**
A $200 e-reader is sold in bulk to your store for $186. Calculate the trade discount rate.
**Options:**
- A: 8%
- B: 92%
- C: 7%
- D: 93%
**Solution:**
To calculate the trade discount rate, use the following steps:
1. Determine the amount of the discount:
\[ \text{Discount Amount} = \text{Original Price} - \text{Discounted Price} \]
\[ \text{Discount Amount} = 200 - 186 = 14 \]
2. Calculate the trade discount rate as a percentage of the original price:
\[ \text{Discount Rate} = \left( \frac{\text{Discount Amount}}{\text{Original Price}} \right) \times 100 \]
\[ \text{Discount Rate} = \left( \frac{14}{200} \right) \times 100 \approx 7\% \]
Thus, the correct answer is **C: 7%**.
---
*This problem helps in understanding the concept of trade discounts and how to calculate the discount rate as a percentage.*](https://content.bartleby.com/qna-images/question/657b0f2c-505d-4f01-9591-bc88ec786b35/76ac4ad0-1f42-4864-a95c-860b5c5e3a3e/sesgw4_processed.jpeg)
Transcribed Image Text:### Trade Discount Rate Calculation
**Problem:**
A $200 e-reader is sold in bulk to your store for $186. Calculate the trade discount rate.
**Options:**
- A: 8%
- B: 92%
- C: 7%
- D: 93%
**Solution:**
To calculate the trade discount rate, use the following steps:
1. Determine the amount of the discount:
\[ \text{Discount Amount} = \text{Original Price} - \text{Discounted Price} \]
\[ \text{Discount Amount} = 200 - 186 = 14 \]
2. Calculate the trade discount rate as a percentage of the original price:
\[ \text{Discount Rate} = \left( \frac{\text{Discount Amount}}{\text{Original Price}} \right) \times 100 \]
\[ \text{Discount Rate} = \left( \frac{14}{200} \right) \times 100 \approx 7\% \]
Thus, the correct answer is **C: 7%**.
---
*This problem helps in understanding the concept of trade discounts and how to calculate the discount rate as a percentage.*
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