How to Calculate a Percentage Discount
Calculate the discount amount, final price, stacked discounts, and original price from a known sale price.
A percentage discount tells you how much of the original price is removed. The key is to distinguish the amount saved from the final sale price.
Calculate the amount saved
savings = original price × discount rate
A $120 item at 25% off saves 120 × 0.25 = $30.
Calculate the sale price
sale price = original price × (1 − discount rate)
120 × 0.75 = $90.
Stacked discounts are multiplicative
Suppose a $100 item is 20% off and then gets an additional 10% off. The first discount gives $80. The second removes 10% of $80, which is $8. The final price is $72, equivalent to 28% off the original—not 30%.
Work backwards from a sale price
If an $80 sale price represents 20% off, then the sale price is 80% of the original:
original = 80 ÷ 0.80 = $100.
Compare a percentage with a fixed-dollar coupon
For a $60 purchase, 20% off saves $12, so a $15 coupon is better. For a $100 purchase, 20% saves $20. Convert each offer to the final checkout price before choosing.
Watch for exclusions
Retail promotions can have minimum spends, maximum discounts, excluded products, or tax rules that change the final amount. The arithmetic is only one part of the offer.