How to Calculate a Discount and Sale Price

A discount reduces a price by a percentage. The amount saved is the original price times the discount rate, and the sale price is what remains. For a 25 percent discount on an 80 dollar item, the saving is 80 times 0.25, which is 20 dollars, so the sale price is 60 dollars.

A faster shortcut is to multiply by what remains: 80 times 0.75 gives the 60 dollar sale price in one step. This is handy for mental math, since 30 percent off simply means paying 70 percent of the price.

When a coupon applies on top of an existing sale, the discounts do not add together. An item marked 20 percent off with an extra 10 percent coupon is not 30 percent off. The second discount applies to the already-reduced price.

On a 100 dollar item, 20 percent off gives 80 dollars, and 10 percent off that gives 72 dollars. That is an effective discount of 28 percent, not 30. The general rule is to multiply the remaining fractions: 0.80 times 0.90 equals 0.72.

Sometimes you see a before and after price and want the actual discount. Subtract the sale price from the original, divide by the original, and multiply by 100. An item that dropped from 45 dollars to 36 dollars is (45 minus 36) divided by 45, which is 0.20, or 20 percent off.

This is the honest way to compare deals. A larger dollar saving on a pricier item can still be a smaller percentage than a modest saving on a cheap one, so the percentage tells you which is the better relative deal.

The calculator runs the forward and reverse math and can chain multiple discounts.

In most places, sales tax is calculated on the discounted price, since that is what you actually pay. A 25 percent discount therefore lowers both the price and the tax charged on it, though a few jurisdictions treat manufacturer coupons differently.

Watch for free-shipping or spend thresholds. A steep discount can push your total below a free-shipping minimum, and the added shipping can erase part of the saving, so compare the final checkout total, not just the item price.