What is a single discount equivalent to the three successive discounts of 30%, 25% and 40%?
Show answer & explanation
Correct answer: B
Explanation
The correct answer is Option 2 i.e. 68.5%.
Successive discounts: 30%, 25%, 40%
Equivalent discount = 1 - (1 - 0.30) × (1 - 0.25) × (1 - 0.40)
= 1 - (0.70 × 0.75 × 0.60)
= 1 - 0.315
= 0.685 or 68.5%