How to Calculate Discount and Sale Prices

Clearance sales, seasonal markdowns, and promotional events (like Black Friday) are perfect opportunities to secure bargains. However, stores usually display promotional discounts as percentages (e.g., “30% off” or “save 45%”), leaving it up to you to figure out the actual price at the register.

The Math of Calculating a Discount

Finding the final price of a discounted item involves three basic steps:

1. Calculate the Savings Amount:

   Savings = Original Price × (Discount Percentage / 100)

2. Calculate the Discounted Price:

   Discounted Price = Original Price - Savings

3. Apply Sales Tax (If Applicable):

   Final Price = Discounted Price × (1 + Tax Rate % / 100)

Calculation Example:

If you buy a jacket originally priced at $80 with a 30% discount:

• Savings = $80 × (30 / 100) = $24
• Discounted Price = $80 - $24 = $56 You save $24 and pay $56.

Stacked or Double Discounts

In retail, you might encounter stacked discounts, such as “an extra 20% off already discounted items.”

It is important to remember that percentage discounts do not add up directly. A 30% discount followed by a 20% discount is not a 50% discount. The second markdown applies to the already discounted price, not the original price:

• Original Price: $100
• First 30% discount reduces the price to $70
• Second 20% discount applies to $70: 70 × 0.8 = $56 (resulting in a total net discount of 44%).

To calculate your shopping totals instantly while browsing stores, use our free online Discount Calculator.