1. What is Chain Discount?

Chain discount, also known as series discount, refers to multiple discounts applied sequentially to a list price. Each discount is calculated on the previous discounted price rather than the original list price.

2. How Does the Calculator Work?

The calculator uses the chain discount formula:

Where:

• \( List\ Price \) — Original price before any discounts
• \( d_1, d_2, ... \) — Discount percentages expressed as decimals

Explanation: Each discount is applied sequentially to the previous discounted amount, not to the original list price.

3. Importance of Chain Discount Calculation

Details: Accurate chain discount calculation is crucial for businesses to determine the actual cost of goods, calculate profit margins, and make informed purchasing decisions.

4. Using the Calculator

Tips: Enter the list price in currency units, followed by up to three discount percentages. All values must be valid (list price > 0, discounts between 0-100%).

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between chain discount and single discount?
A: A single discount is applied once to the list price, while chain discounts are applied sequentially, with each discount calculated on the previous discounted amount.

Q2: How do I calculate the equivalent single discount?
A: Equivalent single discount = 1 - [(1 - d1) × (1 - d2) × ...] expressed as a percentage.

Q3: Are chain discounts common in business?
A: Yes, chain discounts are commonly used in wholesale, distribution, and manufacturing industries where multiple discounts may apply.

Q4: Can I add more than three discounts?
A: This calculator supports up to three discounts, but the formula can be extended to accommodate more discounts if needed.

Q5: How does chain discount affect profit margins?
A: Chain discounts reduce the selling price, which directly impacts profit margins. Accurate calculation is essential for maintaining profitability.