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Give an example of when it would be beneficial to choose one type of discount instead...

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valencia10 | Student, College Freshman | eNotes Newbie

Posted November 27, 2010 at 3:07 PM via web

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Give an example of when it would be beneficial to choose one type of discount instead of another.

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neela | High School Teacher | (Level 3) Valedictorian

Posted November 27, 2010 at 3:53 PM (Answer #1)

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We give two types of discount in the example below:

A mechant gives 10% dicount on TV sets.  Another merchant gives a double discount of  6%  and over that another 4% .  Where to go for our adantage . The second type of double discount looks the same  as the  2 discounts the 2nd merchant gives add up to 10%.

So let us calculate if the original price is $1000.

In the first type we get 10% of 1000 = $100.  we save $100 over the original price.

In the 2nd type , 6% of $1000 = $60.

So the  price after 6%discount = $(1000-60) = $940.

4% discount over $940 = $940*0.04 = $37.6.

So the final price after discount = 940 - 37.6 = $902.4.

So the the savings is $(1000 - 902.4) = $97.6.

Therefore the first one better from the point of view of purchaser. The second is better for the seller.

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justaguide | College Teacher | (Level 2) Distinguished Educator

Posted November 27, 2010 at 3:58 PM (Answer #2)

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Your question is very vague. I will try to give an example and explain the concept. Assume you go to a supermarket A and you are offered a discount of 10% on a product by the manufacturer and the supermarket offers an additional discount of 5% on the final price. In supermarket B, there is no discount by the manufacturer but the supermarket offers a 15% discount. In both the cases the original price of the product is the same. Should you buy the product from supermarket A or B?

Now if the original price is P, after applying the discounts the final price that you have to pay at supermarket A is P*(1-10%)(1-5%) = P*0.855. In supermarket B, the final price is P*(1-15%) =P*0.85

Therefore though 10 and 5 add up to 15, the price you pay at supermarket B is lesser than what you have to pay at supermarket A.

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