Question
Download Solution PDFA company offers the following:
I. Successive discounts of 25% and 5%
II Successive discounts of 20% and 10%
III Successive discounts of 22% and 8%
Which offer is the best for a customer?
Answer (Detailed Solution Below)
Detailed Solution
Download Solution PDFFormula used:
Effective discount = 100 - [(100 - discount1) × (100 - discount2) / 100]
Calculations:
I. Successive discounts of 25% and 5%:
⇒ Effective discount = 100 - [(100 - 25) × (100 - 5) / 100]
⇒ Effective discount = 100 - [75 × 95 / 100]
⇒ Effective discount = 100 - 71.25 = 28.75%
II. Successive discounts of 20% and 10%:
⇒ Effective discount = 100 - [(100 - 20) × (100 - 10) / 100]
⇒ Effective discount = 100 - [80 × 90 / 100]
⇒ Effective discount = 100 - 72 = 28%
III. Successive discounts of 22% and 8%:
⇒ Effective discount = 100 - [(100 - 22) × (100 - 8) / 100]
⇒ Effective discount = 100 - [78 × 92 / 100]
⇒ Effective discount = 100 - 71.76 = 28.24%
∴ The correct answer is option (4) (Maximum Discount).
Last updated on Dec 9, 2024
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