Taxes and Discounts: order of operations question

Derek Atkins warlord@MIT.EDU
14 Jun 2002 23:41:27 -0400

More on the problem.  I said:

> In one way, you always compute the discount off the pretax number, and
> compute the taxes off of either the pretax value or "pretax-discount"
> value.  In the other way, you either compute the tax on
> "pretax-discount", or you compute the discount on "pretax+taxes".

I'm not convinced I got all the cases right.  I actually think there
are three (well, four, but two are equivalent) cases:

In two cases, you always compute the discount off the pretax number
and compute the tax off of either "pretax" or "pretax-discount".  In
the other cases you always compute the tax off the pretax number, and
compute the discount off of either "pretax" or "pretax+taxes".  As you
can see, computing both tax and discount off of the pretax (the first
choice of both options) is the same.  But there are still three ways
to make this computation:

        tax             discount
1)      pretax          pretax
2)      pretax-discount pretax
3)      pretax          pretax+taxes

(I don't think there is any way to compute the tax off pretax-discount
and discount off of pretax+taxes at the same time).  Is it reasonable
to provide all three options?  If not, what are the reasons?  If so,
how should they be named?


       Derek Atkins, SB '93 MIT EE, SM '95 MIT Media Laboratory
       Member, MIT Student Information Processing Board  (SIPB)
       URL:    PP-ASEL-IA     N1NWH
       warlord@MIT.EDU                        PGP key available