Chapter P, Problem 11E

Trade Discount Often retailers sell merchandise at a suggested retail price determined by the manufacturer. The trade discount is the percentage discount given to the retailer by the manufacturer. The resulting price is the retailers’ net cost and so is called the cost price. For example, if the suggested retail price is $\$100.00$ and the trade discount is $45\%$, then the cost price is $\$100.00-45\%\times 100=55.00$ dollars.

a. If an item has a suggested retail price of $\$9.99$ and the trade discount is $40\%$, what is the retailers’ cost price?

b. If item has a cost price of $\$37.00$ and a suggested retail price of $\$65.00$, what trade discount was used?