What single rate of discount would be equivalent to a series of 25%/18%/10%?
A) 55.4%
B) 53.0%
C) 41.7%
D) 34.3%
E) 44.7%

Question

Quizplus · Accepted Answer

To find the single equivalent discount rate for a series of discounts, we use the formula for successive discounts: $ \text{Net Price Factor} = (1 - d_1)(1 - d_2)(1 - d_3) $, where $d_1, d_2, $ and $d_3$ are the decimal forms of the discounts. For 25%, 18%, and 10%, we have $d_1 = 0.25$, $d_2 = 0.18$, and $d_3 = 0.10$. Thus, the Net Price Factor = $(1 - 0.25)(1 - 0.18)(1 - 0.10) = 0.75 \times 0.82 \times 0.90$. Calculating this gives a Net Price Factor of approximately 0.553. The equivalent single discount is $1 - \text{Net Price Factor} = 1 - 0.553 = 0.447$ or 44.7%.

What Single Rate of Discount Would Be Equivalent to a Series