How To Calculate a Discount Using 2 Methods (With Examples)

• There are two main ways to calculate a discount. The first calculates the discount price exactly, while the other provides a rough estimate.
• The first method can help with activities such as sales forecasts, providing an accurate picture of a business' earning potential.
• The second method may be useful for establishing an approximate idea of the profitability of a business even with discounted prices.

How to calculate a discount as a percentage of the original price

1. Convert the percentage to a decimal

Example: Shoe Mart wants to offer a 25% discount on winter boots. Moving the decimal point of 25 two spaces to the left results in the figure 0.25.

2. Multiply the original price by the decimal

Example: Winter boots at Shoe Mart originally sold for $147. To determine the discount value, a sales professional multiplies that price by a discount of 0.25. The product of $147 and 0.25 is $36.75. Therefore, the boots have been discounted by $36.75.

3. Subtract the discount from the original price

Example: Since the discount value for Shoe Mart's winter boots is $36.75, the company can subtract that figure from the original price of $147. The resulting difference is $110.25, which is how much Shoe Mart earns per sale of the boots.

How to calculate a discount through estimation

1. Round the original price

Example: The original price of winter boots at Shoe Mart was $147. Here, the company can round up to the nearest tens place, which is $150.

2. Find 10% of the rounded number

Example: A sales professional finds that the rounded price of the winter boots is $150.00. If they move the decimal point one place to the left, they can determine that 10% of $150 is $15.

3. Determine "10s"

Example: There are two 10s in 25%. They know this because 10 times 2 equals 20. A third 10 would equal 30, which would exceed the value of 25. 

4. Estimate the discount

Example: The rounded price of the winter boots is $150. Of that, 10% is $15. The discount is 25%, and there are two 10s in the number 25. Multiplying the 10% amount by 2 results in a product of $30.

5. Account for 5%

Example: The Shoe Mart discount on winter boots is 25%, and 10% of the original rounded price of $150 is $15. To account for the remaining 5%, they divide $15 by 2 for a quotient of $7.50. Therefore, 5% of $150 is $7.50.

6. Add the 5%

Example: In step four, they found that 20% of $150 is $30. In step five, they found that 5% of $150 is $7.50. Adding the percentage values together gives us a total discount of $37.50.

7. Calculate the sale price

Example: The winter boots at Shoe Mart were rounded from $147 to $150. The total estimated discount amounted to $37.50. Subtracting $37.50 from $150 results in a difference of $112.50. The estimated sale price of the winter boots is $112.50.

2 more examples of how to calculate a discount

Example 1

Example 2

1. Round the original baseline price to the nearest 10. In this case, $1,245 rounds up to $1,250. 
2. Find 10% of $1,250, which is $125. 
3. Consider that only one 10 goes into the discount percentage of 15. Multiplying 1 by $125 results in an initial estimated discount of $125. 
4. To account for the 5% in the discount value, divide $125 by 2 for a quotient of $62.50.
5. Add $62.50 to the initial estimated discount of $125. The sum is $187.50.
6. Subtract $187.50 from the original baseline price of $1,250. The difference is $1,062.50. That's the estimated discount price.