An item undergoes two successive discounts: 12.5% (i.e., 1/8) and then 20%. After those discounts, a tax of 18% is applied on the reduced price, and the final amount the customer pays is ₹927. What was the original price of the item? (Give exact value and a rounded amount to two decimal places)
Show answer & explanation
Correct answer: D
Explanation
Given:
First discount = 12.5%
Second discount = 20%
Tax = 18%
Final amount = ₹927
By formula:
Final amount = P × (1 − d₁) × (1 − d₂) × (1 + t)
927 = P × (1 − 0.125) × (1 − 0.20) × (1 + 0.18)
927 = P × 0.875 × 0.80 × 1.18
927 = P × 0.826
P = ₹1122.28 (approximately)
Original price = ₹1122.28.