Sam's Discount Appliance Company just received a shipment of 30 washing machines. The invoice list price for each washing machine is $365. The manufacturer's catalogue indicates that Sam can take the following discounts: 30/15/10 with 30 percent being the normal markup, 15 percent for free delivery and hookup, and 10 percent for local advertising and point -of -sale displays. If Sam performs all services required by the vendor, his single equivalent discount will be
A) 53.55%.
B) 45.00%.
C) 46.45%.
D) 55.00%.

Question

Quizplus · Accepted Answer

The single equivalent discount can be calculated by combining the three discounts into one. The formula to calculate the single equivalent discount (SED) when multiple discounts are given is: SED = 1 - (1 - d1)(1 - d2)(1 - d3)... where d1, d2, d3, etc., are the decimal forms of the discounts. For Sam's discounts, this becomes: SED = 1 - (1 - 0.30)(1 - 0.15)(1 - 0.10) = 1 - (0.70)(0.85)(0.90) = 1 - 0.5355 = 0.4645 or 46.45%.

Sam's Discount Appliance Company Just Received a Shipment of 30