What is the effective discount percentage if a shopkeeper offers a scheme discount 'buy five and get one free'?
Show answer & explanation
Correct answer: B
Explanation
The correct answer is Option 2 i.e. 16.67%.
If there were no discounts, the customer would pay for all 6 items. Let the price of one item be P.
Then, the total cost without the discount = 6 × P = 6P
Under the 'buy five and get one free' offer, the customer only pays for 5 items, so
The total cost with the discount = 5 × P = 5P
The discount amount is the difference between the total cost without the discount and the total cost with the discount
Discount amount = 6P - 5P = P
The effective discount percentage is the discount amount as a percentage of the total cost without the discount
Effective discount percentage = P/6P × 100
⇒ 1/6 × 100 = 16.67%
Thus, the effective discount percentage is approximately 16.67%.