Question

When a discount of 15% is given by a retailer is it the same as giving three successive discounts of 5% each? Give arguments to support your answers. OR To calculate a 15% tip on a $24 bill a customer adds $2.40 and half of $2.40, or $1.20, to get $3.60. Is this method valid? Why or why not? Who is smart and can answer this question?

Answer 1

1. Consider what happens to the price when the first discount of 5% is given. The price will reduce of course. Then the next 5% discount will be based on the reduced price and will be smaller than the first discount of 5%. Similarly the third 5% discount will be even smaller than the second 5% discount. Therefore the result of giving three sucessive 5% discounts will be a smaller total discount than the single 15% discount.
2.A single calculation of a 15% tip gives $24 x .15 = $3.60. The customer based both calculations of 10% and 5% on the full $24 bill. Therefore the customer's method got the correct answer for the 15% tip.