Thursday, August 2, 2012

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

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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