How to Calculate a Discount: Formula & Examples

A discount reduces an original price by a percentage. The basic calculation is simple, but it helps to separate the discount amount from the final price so you know exactly what a sale price represents.

Discount formula

Discount amount: original price × discount percentage ÷ 100

Final price: original price − discount amount

Example: 20% off ₹2,500

First calculate the discount: ₹2,500 × 20 ÷ 100 = ₹500. Then subtract it from the original price: ₹2,500 − ₹500 = ₹2,000.

Calculate the final price directly

You can also multiply the original price by the percentage that remains after the discount.

For a 20% discount, 80% remains, so ₹2,500 × 0.80 = ₹2,000.

How to compare two discounts

A 30% discount is larger than a 20% discount when they are applied to the same original price. But compare the actual money saved when the original prices differ. A 20% discount on ₹5,000 saves ₹1,000, while 30% off ₹2,000 saves ₹600.

Stacked discounts are not usually added

If a shop applies 20% off and then another 10% off the reduced price, the total reduction is not 30%. Starting with ₹1,000, the first discount gives ₹800; the second removes ₹80, leaving ₹720. The effective discount is therefore 28%.

How to check a sale price

1. Write down the original price.
2. Convert the discount percentage to a decimal.
3. Calculate the discount amount.
4. Subtract it from the original price.
5. Round only at the end when the price is displayed in currency.

The Internet Toolbox Discount Calculator is useful when you want to compare several prices or check a sale calculation quickly. For percentage changes that are not specifically discounts, use the Percentage Calculator.

Common mistake: using the wrong base price

The percentage is normally applied to the price immediately before that discount. If the price has already been reduced, a second discount uses the reduced price as its base unless the store states a different rule.

Quick reference

• Discount amount = original price × discount% ÷ 100
• Final price = original price − discount amount
• 20% off means 80% of the original price remains
• Sequential discounts should be calculated one after another