1. What Is The Original Cost Formula?

The Original Cost Formula calculates the original price of an item before a discount was applied, based on the sale price and discount percentage. This is useful for financial analysis and price comparison.

2. How Does The Calculator Work?

The calculator uses the formula:

Where:

• \( Sale \) — The discounted sale price of the item
• \( Discount \) — The discount rate expressed as a decimal (e.g., 0.20 for 20%)

Explanation: The formula reverses the discount calculation to determine the original price before the discount was applied.

3. Importance Of Original Cost Calculation

Details: Calculating original cost helps in budgeting, financial planning, and understanding the true value of discounted items. It's essential for retailers and consumers to evaluate pricing strategies.

4. Using The Calculator

Tips: Enter the sale price in dollars and the discount rate as a decimal (e.g., 0.15 for 15%). Both values must be valid (sale price > 0, discount between 0-0.99).

5. Frequently Asked Questions (FAQ)

Q1: Why calculate original cost instead of sale price?
A: Calculating original cost helps understand the actual value before discounts, useful for comparison shopping and financial analysis.

Q2: What if the discount is 0%?
A: If discount is 0%, the original cost equals the sale price since no discount was applied.

Q3: Can this formula handle percentage discounts over 100%?
A: No, discount rates must be between 0% and 99% (0.00 to 0.99) as discounts cannot exceed 100%.

Q4: How accurate is this calculation?
A: The calculation is mathematically precise when correct values are entered, showing the exact original price before discount.

Q5: Can I use this for multiple discounts?
A: This formula calculates original price after a single discount. For multiple successive discounts, a different approach is needed.