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    Question

    Find the single discount rate percentage equivalent to

    the successive discounts of 10%, 20% and 20%.
    A 38.2 Correct Answer Incorrect Answer
    B 42.4 Correct Answer Incorrect Answer
    C 28.4 Correct Answer Incorrect Answer
    D 27.4 Correct Answer Incorrect Answer

    Solution

    Effective Discount = 1 -(1-0.10) (1-0.20) (1 - 0.20) =1- (0.90 × 0.80 × 0.80)   = 1- 0.576 = 0.424 Convert to Percentage- Single Discount Rate = 0.424 × 100 = 42.4% The equivalent single discount rate is 42.4%.

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