Question 121

Which of the following successive discounts is better to a customer
(a) 20%, 15%. 10% or
(b) 25%, 12%, 8% ?

Solution

Let the initial amount be Rs y

case 1: 3 discounts of 20%, 15%, 10% are given

amount after 1 st discount of 20% = 0.8y

amount after 2nd discount of 15% = 0.85 x 0.8y = 0.68 y

amount after 3rd discount of 10% = 0.9 x 0.68 y = 0.612 y

So , effective discount for the given 3 discount = $$\frac{y - 0.612y}{y}$$ x 100 = 38.8 %

case 2: 3 discounts of 25%, 12%, 8%

amount after 1 st discount of 25% = 0.75 y

amount after 2nd discount of 12% = 0.88 x 0.75 y = 0.66 y

amount after 3rd discount of 8% = 0.92 x 0.66 y = 0.6072 y

So , effective discount for the given 3 discount = $$\frac{y - 0.6072y}{y}$$ x 100 = 39.28 %

As we can see that effectively 2nd series of succesive discounts is more advantageous for consumer. So the answer is option B


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