Question

Which of the
following successive discounts is better to a customer
1) 20%, 15% 10% or
2) 25%, 12%, 8%

• A. (1) is better
• B. (2) is better
• C. (1) or (2) (both are same)
• D. None of these

Answer 1

Answer: (B)

Let the price of the article be $M$

In the first case, the final amount that is to be paid by the customer after successive discounts = $M\ast (1-0.20)\ast (1-0.15)\ast (1-0.10)=M\ast 0.8\ast 0.85\ast 0.9=0.612M$

In the second case, the final amount that is to be paid by the customer after successive discounts = $M\ast (1-0.25)\ast (1-0.12)\ast (1-0.08)=M\ast 0.75\ast 0.88\ast 0.92=0.6072M$

Since, $0.6072<0.612$, second set of discounts is a better option to the customer