Percentage Discount Formula: 4 Methods With Worked Examples

There is no single "discount formula" — there are four equivalent ways to write it. Some are easier on paper, some are easier in Excel, and some are easier in your head. This guide walks through all four, shows when each is the right tool, and gives you the simplest version to memorize.

Method 1: Subtraction (the Basic Version)

Sale Price = Original Price - (Original Price × Discount %)

This is the version most schools teach. You calculate the discount amount first, then subtract.

Example: 25% off $200. Discount = $200 × 0.25 = $50. Sale price = $200 - $50 = $150.

It is the most intuitive but it has two steps. The other methods do it in one.

Method 2: Multiplication by (1 - Rate)

Sale Price = Original Price × (1 - Discount %)

This collapses the formula into a single multiplication. Instead of calculating the discount and subtracting, you multiply the price by the percentage you actually pay.

Example: 25% off $200. You pay 75% (which is 1 - 0.25). Sale price = $200 × 0.75 = $150.

Same answer, faster math. This is the version that works best in spreadsheets and code because it is one operation instead of two.

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Method 3: Fraction Form

Sale Price = Original Price × ((100 - Discount %) ÷ 100)

Same as Method 2 but with the percentage written as a fraction over 100. This version is common in math textbooks because it shows the work clearly.

Example: 25% off $200. Sale price = $200 × ((100 - 25) ÷ 100) = $200 × (75/100) = $200 × 0.75 = $150.

Use this version when you need to show your work or explain it to someone learning percentages for the first time.

Method 4: Excel / Spreadsheet Formula

For Excel or Google Sheets, the most common formula is:

=A1*(1-B1)

Where A1 contains the original price and B1 contains the discount as a decimal (so 25% would be 0.25). The result is the sale price.

If your discount is stored as a whole number (like 25 instead of 0.25), use:

=A1*(1-B1/100)

To get the discount amount instead of the sale price:

=A1*B1 (if B1 is a decimal)

To find what percent discount was applied if you only know original and sale prices:

=(A1-C1)/A1 (where C1 is the sale price; format the cell as percentage)

The Method to Memorize

If you only remember one version, make it Method 2: Original × (1 - discount as decimal) = Sale price. It works for any percentage, it is one step, and it is the easiest to do in your head once you internalize it.

For 30% off, multiply by 0.70. For 25% off, multiply by 0.75. For 40% off, multiply by 0.60. The pattern is: 1 minus the discount, written as a decimal.

For complex prices or stacked discounts, use free discount calculator — it handles all four methods automatically.

Frequently Asked Questions

What's the difference between a discount and a markdown?

They mean the same thing. "Markdown" is the retailer-side term (the store marks the price down), while "discount" is the customer-side term (the customer gets a discount). Both refer to the same percentage reduction from the original price.

How do I calculate compound discounts (e.g., 20% off then 10% extra)?

Apply each discount sequentially. Original price × (1 - first discount) × (1 - second discount). Example: $100 with 20% off then 10% off = $100 × 0.80 × 0.90 = $72. This is NOT the same as a single 30% discount, which would be $70.

Can the discount calculator handle decimal percentages like 12.5%?

Yes. Enter 12.5 (or whatever decimal you need) into the discount field. The math works the same way regardless of whether the discount is a whole number or a decimal.