Find a single discount equivalent to two successive discounts of 15% and 10%.
Show answer & explanation
Correct answer: B
Explanation
The correct answer is option 2 i.e. 23.5%.
⇒ Equivalent discount = 1 - (1 - d1)(1 - d2)
(d1) is the first discount (15% or 0.15),
(d2) is the second discount (10% or 0.10).
⇒ Equivalent discount = 1 - (1 - 0.15)(1 - 0.10)
⇒ Equivalent discount = 1 - (0.85)(0.90)
⇒ Equivalent discount = 1 - 0.765
⇒ Equivalent discount = 0.235
The single equivalent discount is 23.5%.