Discussion

A single discount equivalent to a discount series of 20%, 10% and 25% is?

Answer: C

Chain the retained fractions.

\[ (1-0.20)(1-0.10)(1-0.25) = 0.80 \times 0.90 \times 0.75 \]

\[ 0.80 \times 0.90 = 0.72, \qquad 0.72 \times 0.75 = 0.54 \]

\[ \text{single equivalent discount} = 1 - 0.54 = 0.46 = 46\% \]

The rates add to 55%, which is offered as the first option; the true figure is always lower, because each successive discount acts on a smaller base.

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