Discounting
And
Factoring
Techniques
Introduction
Discount in the general term is the reduction made
from the amount of a bill in lieu of its immediate cash
payment or in lieu of bulk purchases by a trader.
Discount in lieu of cash payment is called cash
discount.
Discounts are reductions to a basic price of goods or
services.
Origin of DISCOUNT
Modification of French word décompter, from Old
French word desconter, from Medieval Latin word
discomputare, from Latin dis-+ computare to
count.
First Known Use: 1629
What is Discounting?
The process of determining the present value of
a payment or a stream of payments that is to be
received in the future is called discounting.
Given the time value of money, a dollar is worth
more today than it would be worth tomorrow
given its capacity to earn interest.
DEFINITIONS OF DISCOUNT
“A reduction made from the gross amount or value of
something”
“A reduction made from a regular or list price,a
proportionate deduction from a debt account usually
made for cash or prompt payment
“A deduction made for interest in advancing money
upon or purchasing a bill or note not due”
Advantages of Offering
Discounts
 Attracts Customers
 Increases Sales
 Free Up Room
 Reputation
 Meet Goals
 Improves Goodwill
 Higher Consumer Sales
How to Calculate Discounts?
Discounts can be anything from a few rupees off to a
certain percentage off. If it is 10% off on a Rs.100
product then you would subtract Rs.10 from Rs.100
which is Rs.90. If it is 20% off on Rs.100, it would be
Rs.80
Discounts are reductions to a basic price of goods or
services.
Types of Discounts
TRADE DISCOUNT
CASH DISCOUNT
Trade Discount
A trade discount is the amount by which a
manufacturer reduces the retail price of a
product when it sells to a reseller, rather than to
the end customer.
Cash Discount
A cash discount is an incentive that a seller offers to
a buyer in return for paying a bill owed before the
scheduled due date.
Examples
 2/10 net 30 - this means the buyer must pay within
30 days of the invoice date, but will receive a 2%
discount if they pay within 10 days of the invoice
date.
 2/15 net 40 ROG - this means the buyer must pay
within 40 days of receipt of goods, but will receive
a 2% discount if paid in 15 days of the invoice date.
(ROG is short for "Receipt of goods.
Other Types of Discounts
Employee
Discount
Disability
Military
Discount
Discount
Educational
Toddler
Discount
Discount
Senior
Discount
What do you mean by Factoring?
Factoring is the decomposition of an object (for
example, a number, a polynomial, or a matrix) into
a product of other objects, or factors, which
when multiplied together give the original.
To factor a number means to break it up into
numbers that can be multiplied together to get
the original number.
Aim of Factorization
The aim of factoring is usually to reduce something to
“basic building blocks”, such as numbers to prime
numbers, or polynomials to irreducible polynomials.
Factoring integers is covered by the fundamental
theorem of arithmetic and factoring polynomials by
the fundamental theorem of algebra. Viète's
formulas relate the coefficients of a polynomial to its
roots.
Factoring Methods
Greatest
Factor
Common
By
Factor
Grouping
Special
Case
Greatest Common Factor
A Common Factor is something you can divide each term
of a polynomial by evenly. The Greatest Common Factor
(GCF) is the largest common factor you can evenly divide
each term of a polynomial by.
Factoring by Grouping
Factoring by grouping requires that you have four terms.
What you want to do is group the terms into two groups of
two terms each. The next step is to factor out the GCF in
each set of parentheses.
Special Case Factoring
There are some special cases for factoring that you
just have to memorize.
• a² -b² = (a+b)(a-b)
• a³+b³ = (a+b)(a²-ab+b²)
• a³- b³ = (a-b)(a²+ab+b²)
Difference of Perfect Squares
Sum of Cubes
Difference of Cubes
When you see that you have a two-term nonlinear polynomial, check to see if it fits any of
the formulas.