The single equivalent discount rate of the trade discount 5/4/1 is:

Question

Quizplus · Accepted Answer

The formula to calculate the single equivalent discount rate (SED) is:

SED = 1 - ((1-d1) x (1-d2) x ... x (1-dn))

where d1, d2, ..., dn are the individual trade discounts expressed as decimals.

For the given trade discount of 5/4/1, the individual trade discounts are 5%, 4%, and 1%, respectively, which can be expressed as 0.05, 0.04, and 0.01. Therefore, the SED can be calculated as:

SED = 1 - ((1-0.05) x (1-0.04) x (1-0.01))
SED = 1 - (0.95 x 0.96 x 0.99)
SED = 1 - 0.904704
SED = 0.095296

Thus, the SED is 0.095296 or 9.5296%. To find the answer in the given options, we need to convert the SED to a percentage and select the closest option. Only option B (0.90288) is near the converted SED. Therefore, the best choice is B.

The Single Equivalent Discount Rate of the Trade Discount 5/4/1