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

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

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By: anil on 05 May 2019 01.57 am

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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