What is a Discount?

S1-SA2-0854

Grade Level:

Class 5

Finance, Economics, Maths, Business, India-specific

Definition

What is it?

A discount is a reduction in the original price of something. It means you pay less than the usual price, which is a saving for you.

Simple Example

Quick Example

Imagine your favourite cricket bat costs ₹1000. If the shop offers a 10% discount, it means you get ₹100 off the price. So, you only pay ₹900 for the bat!

Worked Example

Step-by-Step

Let's say a new school bag costs ₹500. The shop is offering a 20% discount.

Step 1: Find the discount amount. Discount = 20% of ₹500.
---Step 2: Convert the percentage to a decimal or fraction: 20% = 20/100.
---Step 3: Calculate the discount amount: (20/100) * 500 = 0.20 * 500 = ₹100.
---Step 4: Subtract the discount amount from the original price to find the new price. New Price = Original Price - Discount.
---Step 5: New Price = ₹500 - ₹100 = ₹400.
---Answer: The school bag will now cost ₹400.

Why It Matters

Understanding discounts helps you make smart spending choices and save money, which is important for personal finance. This skill is useful in careers like retail management, business, and even when you run your own shop.

Common Mistakes

MISTAKE: Directly subtracting the percentage from the original price (e.g., ₹100 - 10% = ₹90). | CORRECTION: First, calculate the discount amount (e.g., 10% of ₹100 is ₹10). Then, subtract this amount from the original price (₹100 - ₹10 = ₹90).

MISTAKE: Forgetting to subtract the calculated discount amount from the original price. | CORRECTION: Always remember that the calculated percentage amount is the 'saving', which needs to be taken off the original price to find the final selling price.

MISTAKE: Calculating discount on the discounted price when there are multiple discounts. | CORRECTION: Always calculate discounts on the *current* price. If there are two discounts, calculate the first discount, then calculate the second discount on the new, reduced price.

Practice Questions

Try It Yourself

QUESTION: A book costs ₹200. There is a 10% discount. How much is the discount amount? | ANSWER: ₹20

QUESTION: A pair of shoes costs ₹800. If you get a 25% discount, what is the final price you pay? | ANSWER: ₹600

QUESTION: A mobile phone has an original price of ₹10,000. It gets a 15% discount. Then, on the discounted price, there's an extra 5% festival discount. What is the final price of the mobile phone? | ANSWER: ₹8075

MCQ

Quick Quiz

What does a 20% discount on an item mean?

You pay 20% more than the original price.

You get 20 rupees off the original price.

You pay 20% less than the original price.

The item's price increases by 20%.

The Correct Answer Is:

A discount means a reduction in price. So, a 20% discount means you pay 20% less than the original price. Options A and D suggest an increase, and B is only correct if the original price was ₹100.

Real World Connection

In the Real World

You see discounts everywhere in India! From your local kirana store offering a special price on biscuits, to big online shopping apps like Flipkart and Amazon during their 'Big Billion Days' or 'Great Indian Festival' sales, discounts help customers save money. Even during festive seasons like Diwali, shops offer discounts on clothes and electronics.

Key Vocabulary

Key Terms

Original Price: The starting price of an item before any discount | Discount Amount: The money reduced from the original price | Percentage: A way to express a part of a whole, often used for discounts | Sale Price: The final price after the discount is applied

What's Next

What to Learn Next

Now that you understand discounts, you can learn about 'Profit and Loss'. Discounts often affect how much profit a shopkeeper makes, and understanding both helps you see the full picture of buying and selling.