Question : A retailer offers the following discount schemes for buyers on an item.
(i) Two successive discounts of 15%
(ii) A discount of 20% followed by a discount of 10%
(iii) A discount of 30%
Under which scheme the selling price will be the maximum?
Option 1: (ii)
Option 2: (ii) and (iii)
Option 3: (i) and (ii)
Option 4: (i)
Correct Answer: (i)
Solution :
We know, Single equivalent discount = $(a+b-\frac{a×b}{100}$)%, where $a$% and $b$% are successive discounts.
i) Two successive discounts of 15%:
The effective discount,
$= 15 + 15 - \frac{15×15}{100} = 27.75$%
ii) A discount of 20% followed by a discount of 10%:
The effective discount,
$= 20 + 10 - \frac{20×10}{100} = 28$%
iii) A discount of 30%.
Comparing these, we see that the selling price will be maximum under the first scheme because the effective discount is the least in this case (27.75%).
Hence, the correct answer is (i).
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