How to Calculate Cost Savings

As a consumer, you are always looking for ways to save money in your purchasing, which means getting the best price you can find. Sometimes, you need to calculate cost savings on a particular deal. This can be helpful when comparing purchases of goods that are slightly different, to see which deal, relatively, is better for the products offered. You may also want to use the calculation to check and see if the discounts that a merchant is offering are accurate with regard to the price. Either way, the solution to the calculation involves an arithmetic calculation that will render the result as a percentage.

Step 1

Subtract the original price from the discounted price to get the cost savings in cash terms. For example, if a vest has a retail price of $59.50, and is offered at $47.00, the cost savings is $12.50.

Step 2

Divide the cost savings by the original or retail price. Here, $12.50 divided by $59.50 comes to 0.21.

Step 3

Multiply your result, in this case 0.21, by 100. This renders the figure as a percentage. Here, the amount is 21 percent, which is your cost savings or discount on the purchase.