Question

Two dealers offer an article at the same list price. The first allows discount 20%, 10% and 5% and the other of 15%, 12% and 8%. Which is a better offer for the customer? 

(a) 1st offer

(b) 2nd offer

(c) Both 1st offer and 2nd offer

(d) Cannot be determined

Answer 1

Correct option is (a) 1st offer

Let the cost price of the article = Rs 100.

FIRST CASE-

First discount = 20%.

So the first S.P. = Rs(100 − 20) = Rs 80.

Second successive discount = 10%.

So the second S.P. = Rs.80\(\left(1 - \frac{10}{100}\right)\) = Rs 72

Third successive discount = 5%.

So the third S.P. = Rs.72\(\left(1 - \frac{5}{100}\right)\) = Rs 68.4

SECOND CASE-

First discount = 15%.

So the first S.P. = Rs(100 − 15) = Rs85.

Second successive discount = 12%.

So the second S.P. = Rs.85\(\left(1 - \frac{12}{100}\right)\) = Rs 74.8

Third successive discount = 8%.

So the third S.P. = Rs.74.8\(\left(1 - \frac{8}{100}\right)\) = Rs 68.82

∴ The first offer is the better offer for the customer since the final S.P. is less than that of the second offer.