How to Calculate Discounts, Sales Tax, and Final Price

An item costs $89.99. It's 25% off. There's an additional 10% coupon. Sales tax is 8.5%. What do you actually pay?

Shopping math with multiple discounts and taxes gets confusing quickly. Here's how to do it correctly — and a few things most people get wrong.

Single Discount

Final price = Original price × (1 - discount rate)

$89.99 at 25% off: $89.99 × (1 - 0.25) = $89.99 × 0.75 = $67.49

Alternatively: Find the discount amount, then subtract.

Discount = $89.99 × 0.25 = $22.50. Final = $89.99 - $22.50 = $67.49

Multiple Discounts

When you have two discounts applied in sequence, they don't simply add together.

25% off + additional 10% off ≠ 35% off total

The correct method: apply each discount sequentially.

$89.99 → 25% off → $67.49 → 10% off → $67.49 × 0.90 = $60.74

Total discount: ($89.99 - $60.74) ÷ $89.99 = 32.5% — not 35%.

Why? The second 10% is applied to the already-discounted price, which is a smaller number.

Adding Sales Tax

Final price with tax = Price × (1 + tax rate)

$60.74 with 8.5% tax: $60.74 × 1.085 = $65.90

Is Tax Applied Before or After Discount?

Tax is always applied to the final selling price after discounts — not the original price. This is both standard retail practice and typically required by law.

The order: Original price → Apply discounts → Apply tax

Discount vs. Markdown vs. Clearance

• Sale discount: Temporary price reduction, original price shown
• Markdown: Permanent price reduction, often seen at end of season
• Clearance: Heavily discounted to clear inventory, often final sale

The math is the same for all — but be aware that "original" prices can be inflated to make discounts look bigger.

Quick Reference: Common Discounts

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