3.7.2 DISCOUNT
When businesses want to increase the number of customers, they may offer discounts. Discounts are deductions made on the marked price so that the customer pays less.
For example, if a shirt is marked at Ksh. 700 and the dealer reduces the price by Ksh. 100 to Ksh. 600, the Ksh. 100 is known as the discount.
Percentage Discount
Most times shopkeepers express discount as a percentage of the marked price.
Formula:
Percentage Discount = Discount Marked Price × 100%
Example 3.43
Find the amount of money paid by a customer when a television set marked at Ksh. 16,000 is given a discount of 8%.
Solution:
Marked price = 100%
Amount paid = 100% − 8% = 92%
Amount paid = 92 × 16000 100
Amount paid = Ksh. 14,720
Example 3.44
An item is marked at Ksh. 1,200. A customer pays Ksh. 1,140 for it. Calculate the percentage discount offered.
Solution:
Discount = 1200 − 1140 = 60
Discount (%) = 60 1200 × 100%
Discount = 5%
3.7.3 COMMISSION
Commission is the amount of money given to a sales agent for selling goods. It is usually a percentage of the money obtained from sales.
Commission can be paid as straight commission or together with a salary.
Example 3.45
Mary is paid a commission of 12% of the total sales made. If she sold goods worth Sh. 135,000, calculate her commission.
Solution:
Commission = 12 100 × 135000
Commission = Ksh. 16,200
Example 3.46
Ken is paid a basic salary of Sh. 7,000 and a commission of 5% for all goods sold. In a month he sold goods worth Sh. 90,000. Find his total earnings.
Solution:
Commission = 5 100 × 90000 = Ksh. 4,500
Total earnings = 7000 + 4500 = Ksh. 11,500
Example 3.47
Janet earns a salary of Sh. 6,000 and a commission of 10% for sales above Sh. 100,000. If she made sales of Sh. 210,000, calculate her total earnings.
Solution:
Sales above 100,000 = 210000 − 100000 = 110000
Commission = 10 100 × 110000 = Sh. 11,000
Total earnings = 6000 + 11000 = Sh. 17,000
Exercise 3.8 – Discount and Commission
1. The marked price of a water cooler is Sh. 46,500. The shopkeeper offers a discount of 18%. Find the selling price.
Answer (Sh.) =
= (18 ÷ 100) × 46,500
= 8,370
Selling Price = 46,500 − 8,370
= 38,130
2. The price of a dress was reduced from Sh. 960 to Sh. 816. Find the percentage discount.
Answer (%) =
Percentage Discount = (144 ÷ 960) × 100
= 15%
3. After allowing a discount of 8% on a toy, it is sold for Sh. 2,162. Find the marked price.
Answer (Sh.) =
2162 = 92%
Marked Price = (2162 × 100) ÷ 92
= 2,350
4. Tiffany earns a commission of 21% on total sales. If she sold goods worth Ksh. 270,000, find her commission.
Answer (Ksh.) =
= 56,700
5. Cindy earns Ksh. 9,000 per month plus 10% commission. If she sold goods worth Ksh. 300,000, find her total salary.
Answer (Ksh.) =
Total Salary = 9,000 + 30,000
= 39,000
6. Paul earns a basic salary of Ksh. 15,500 and a commission of 4% on sales beyond Ksh. 200,000. If he sold goods worth Ksh. 260,000, find his total salary.
Answer (Ksh.) =
Commission = (4 ÷ 100) × 60,000 = 2,400
Total Salary = 15,500 + 2,400
= 17,900
7. James earns a basic salary of Ksh. 10,000. He earns 5% commission on sales between Ksh. 100,001 and Ksh. 200,000, and 9% commission on sales above Ksh. 200,000. If his total sales were Ksh. 245,000, find his total earnings.
Answer (Ksh.) =
Commission = (5 ÷ 100) × 100,000 = 5,000
Second band: 245,000 − 200,000 = 45,000
Commission = (9 ÷ 100) × 45,000 = 4,050
Total Commission = 5,000 + 4,050 = 9,050
Total Earnings = 10,000 + 9,050
= 19,050