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Discount Definition – Formula, Calculator, Rate


Discount: It is the amount or price of a product less than its original price. The discount can be given on a single product or on the total bill by the seller. Discount is based on the profit and loss, which is basically calculated on the marked price and cost price as well as selling price.

Cost price is the price of the manufacturing of the product. Marked price or Selling Price is the cost set by the seller as per the market standard and selling price is the price at which the product has been sold. When the selling price is less than the market price, then the buyer has said to be got some discount on it.

What is Discount Rate?

A discount is an amount that is adjusted in the form of a percentage on the product or on the marked price of the product. The reduction of the actual rate which is printed on the product is summed up as the discount rate on the particular product. Discount is for basically attracting the customers. There are the following benefits of offering the Discount.

  1. To attract the customers
  2. To clear out the old stock
  3. To encourage customers for buying the products

Discount Formula

The formula of discount is based on the marked price and the selling price. The discount formula is as follows:

Discount = Marked price – Selling price


 M.P(Marked Price) is the actual price of the product without discount.

S.P (Selling Price) is what customers pay for the product.

A discount is a percentage of the market price.


Discount rate (DR) = p×r

Where p = principal amount

r = interest rate

Discount Calculator

The discount for any product is calculated with the knowledge of the marked price and selling price of the product. The discount is calculated using the above formulas.

Discount Definition - Formula, Calculator, Rate_3.1

Discount Rate: FAQ

Q. What is the discount rate?

Ans: The discount is the amount reduced on the actual market price.

Q. How do I calculate a discount rate?

Ans: Discount Rate is calculated by using the above formula.

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About the Author

Aishwarya Bhandarkar is a content writer having experience of 3.5+ years in blogging of creating content for competitive entrance and government exams. She believes in delivering simplifying complex concepts into understandable and user-friendly content on time to the readers and helping aspirants for various exams..