GCECommerceBusiness Documents2024

Alhaji Musa ordered 50 bags of rice at ₦18,000 per bag from Kano Traders. He was granted a trade discount of 10% and a cash discount of 5%. If Alhaji Musa paid promptly, how much did he pay?

A₦769,500CORRECT
B₦810,000
C₦855,000
D₦900,000
AI
Toaster Teacher
Why the answer is A, and why the others tempt you.
Gross price = 50 × ₦18,000 = ₦900,000. Trade discount = 10% × ₦900,000 = ₦90,000; Net price after trade discount = ₦810,000. Cash discount = 5% × ₦810,000 = ₦40,500; Amount paid = ₦810,000 − ₦40,500 = ₦769,500. Trade discount is deducted first before cash discount is applied.
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