The formula to calculate a discount is: Discount = Original Price × Discount Rate. The discount amount is then subtracted from the original price to get the final price: Final Price = Original Price − Discount. Alternatively, you can combine these into one formula: Final Price = Original Price × (1 − Discount Rate).
For example, if an item costs $100 and has a 20% discount, the calculation would be: Discount = $100 × 0.20 = $20, so the final price = $100 − $20 = $80. Or using the combined formula: Final Price = $100 × (1 − 0.20) = $100 × 0.80 = $80.
The discount rate should be expressed as a decimal (so 20% becomes 0.20). If you're calculating the discount percentage instead, use: Discount Percentage = (Discount Amount ÷ Original Price) × 100. This is useful when you know the actual dollar amount of the discount and want to express it as a percentage of the original price.