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November 5, 2025

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Discount Formula: How to Calculate Discounts Easily

Everybody must have seen a board saying “Flat 50% Off” while shopping and thought about how that price is calculated by giving a discount. A discount simply means a reduction from the marked price, helping customers save money while boosting sales for sellers. In this article, you’ll easily learn how to calculate a discount using the discount formula explained step by step and other related formulas in regards to discount formula, which helps to calculate other variables with easy examples and also about successive discounts, and you will also need to keep certain things in mind while calculating a discount to avoid mistakes in real life or exams.

What is discount?

A discount is a decrease in the price of goods or services provided by shopkeepers from the marked price. The marked price (or list price) is the price of goods or services as indicated by the seller without any decrease, and the selling price is the price paid by the customer after the discount. Discounts are often given as a marketing strategy to increase sales or clear old stock.

Discount calculation

For calculating the amount of discount, we apply the following formulas,

Discount = Marked Price (MP) - Selling Price (SP)

(The values marked price and selling price are given)

Discount (%) = (Discount / Marked Price ) × 100

(This is to calculate the discount percentage. The values of the marked price and the selling price are given.

Suggested read on What is MRP under GST?

Steps of the calculation of the discount

Let's understand the steps of the calculation of the discount with an example.

Example: Find the discount amount and discount % if the marked price of a trouser is ₹800 and sold at a price of ₹720.

‍Step 1: Note down the values provided carefully

Marked price = Rs 80 ,Selling Price = Rs ₹720

‍Step 2: With the values given in the example, find the discount amount

Discount =MP -SP = 800-720 =Rs 80

‍Step 3: Ready to calculate Discount %

Formula of Discount percentage(%) =(Discount) / MP) × 100

Put the value of the discount calculated in step 2 and the Marked Price

Discount %= (80/800)x100 =10%

By following the steps the result comes out that discount = ₹80, and the discount percentage = 10%

Other formulas related to discount

There are a few more important formulas related to discount that help you find the Discount, Selling Price (SP), or Marked Price (MP) easily when other respective variables are given, with easy examples.

‍Formula to find the discount

When discount%, MP are given

Discount=Discount%/100x Marked Price

Example = Find the discount on an item whose Marked Price (MP) is ₹500 and Discount% is 25%.

Solution : Discount= 25/100x500 = Rs 125

Formula to Find Selling Price

When the Discount and Marked price are given,

Selling Price =Marked Price - Discount

When the values discount percentage and the marked price are given

Selling Price = Listed/Marked Price [(100−discount%)/100]

Example: Find the selling price of an item whose marked Price is ₹4500 and the discount % is 40%.

Solution = Selling Price = 4500 × [(100 − 40) / 100] where discount% value is 40 %

Result = Selling price =4500 × 60 / 100 = ₹2700

Formula to find the Marked price

When the values of the discount and the selling price are given

Marked price = Selling Price + Discount

When the values of the discount percentage and the selling price are given

Marked Price = (Selling Price × 100) / (100 − Discount %)

Example: Measure the marked /listed price of the product if it is sold at ₹2700 after applying a 40% discount on the product

Solution: Marked Price = (2700 × 100) / (100 − 40)

Result =Marked Price =270000 / 60 = ₹4500

Successive Discount Formula

When the seller offers more than a single discount on the same item, it is equivalent to availing a discount on discount on the cost of the commodities.

Successive Discount Formula =X+Y−(XY)/100

Here,X = Initial discount percentage, Y = Subsequent discount percentage

Let us discuss with an example

Suppose Sita purchased a bracelet which was originally valued at ₹1,000. The shopkeeper gave a discount of 15% for the first time, then, due to a close family connection, the shopkeeper gave another 10% discount on the updated (reduced) price.

In this example successive discount will be calculated using the formula,

Solution using the formula to calculate the final discount.

x= 15% & y=10%

=15 + 10 - (15 X 10) /100

=25 - 1.5 = 23.5%

Selling Price =1000– (23.5 /100 X 1,000) = ₹765.

Common Things to Remember

There are a few common things everybody should remember while computing a discount to avoid errors, which are as follows:

Remember the discount is done on the Marked Price (M.P.) and not on the Cost Price (C.P.).

While applying successive discounts, the second discount is always done on the reduced marked price, which has already been decreased by the initial discount

Always deduct the discount from the marked price in order to determine the selling price.

Conclusion

Understanding the formula for discount makes one wiser in shopping, and for scholars to easily solve mathematical problems involving discounts. Whether it’s a single discount or successive discounts, the key is to know which figures to use and how to apply the formula correctly and avoid any errors or confusion. So next time you see a sale, you will know what the reduction in price will be and how much you are saving.

Suggested reading on Merchant discount rate charges

FAQs

What are some of the various types of discounts?

Promotional discount, trade discount, quantity discount, loyalty and seasonal discount are

Define the marked price used in the discount formula.

It is the original price of the product prior to any discount .Other names are the list price or tag price.

An item which is originally valued at Rs 200, and there is a 15 % discount on it , what is selling price of an item ?

Selling price =Marked price - discount. The discount value is 15/100 X200 =Rs30

Selling price of the item is Rs 200- Rs30 Rs 170, i.e SP=MP-Discount

What is the purpose of giving discounts?

They are provided to attract customers by creating urgency to purchase from the reduced price or to clear the old stocks.

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