Question

At a year end clearance, a car dealer reduces the list price of last years models by %12. if a certain model has a discounted price of 22,500, what was the list price? How much can be saved by purchasing last years model?

Answer 1

Answer:

The list price is 25,568.18

The amount saved on the purchase (discount) is 3,068.18

Explanation:

The discount price can be calculated as follow

(1) list price x discount rate = discount in dollars

then:

list price - discount in dollars = discount price

or

(2) list price (1-discount rate) = discount price

we will use the second formula to solve for list price:

list ( 1 - 12%) = 22,500

22,500 / (1-12%) = list price

22,500/.88 = list price = 25,568.18

Now we calculate the discount using the first formula

25,568.18 x 12%  = 3,068.18

And check if we reach the discount price:

25,568.18 - 3,068.18 = 22,500.00