How to calculate multiple discounts

Apply discounts in order

Each percentage discount is calculated from the price that exists when that discount is applied. After the first discount lowers the price, the second percentage uses a smaller starting amount.

For a $150 item with 25% off, the first discount saves $37.50 and leaves $112.50. If an extra 10% is then applied, it saves $11.25 and leaves a final price of $101.25.

Why you do not add the percentages

Adding 25% and 10% suggests a 35% discount, but the second 10% is not taken from the original price. It is taken from the already discounted price. In the $150 example, the actual savings are $48.75, or 32.5% of the original price.

The order does not change the final price when both reductions are percentages. A 10% reduction followed by 25% produces the same result as 25% followed by 10% because the same multipliers are used.

Find the combined discount percentage

Divide the final price by the original price to find the percentage you still pay. Subtract that from 100% to find the effective combined discount.

If a $200 item falls to $144, you are paying 72% of the original price. The effective discount is therefore 28%.

Include coupons and tax in the right order

Store rules determine whether a dollar coupon applies before or after a percentage discount. Tax is normally calculated after eligible discounts, but the exact treatment depends on the location and type of promotion. Use the subtotal shown at checkout when you need the exact final charge.

• Convert each percentage to a decimal multiplier.
• Apply every discount to the latest price.
• Subtract dollar coupons according to the store’s order.
• Add tax only after finding the taxable subtotal.