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