The difference is because (1-x) is not the same as 1/(1+x) [though they get
closer to each other as x tends towards zero]

To take a more extreme example, a 100% reduction takes the value down to
zero, but to divide by (1+100%) will merely halve the value.
Another way of looking at it is that if you have a 50% reduction it will
then need a 100% increase to get back to the original value.

A 7% rebate would be the multiplication by 93%, not division by (1+7%).
--
David Biddulph

"Jennnifer" wrote in message
...
If I receive a 7% rebate on my total cost of $100,00 why do the 2 formuals
produce differnet results?

=100,000*.93 = $93000

=100,000/1.07 = $93,457

Which is the correct formula to use?