A discount of 20 percent on an order of goods followed

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M7MBA: Moderator; Posts: 2058; Joined: Sun Oct 29, 2017 4:24 am; Thanked: 1 times; Followed by:5 members

A discount of 20 percent on an order of goods followed

by M7MBA » Sat Dec 30, 2017 7:11 am

A discount of 20 percent on an order of goods followed by a discount of 20 percent amounts to

A) the same as one 45 percent discount

B) the same as one 40 percent discount

C) the same as one 36 percent discount

D) the same as one 30 percent discount

E) the same as one 25 percent discount

The OA is the option C.

Why is C? Shouldn't it be B? Experts, can you explain this PS question to me? Thanks.

Quote

Source: Beat The GMAT — Problem Solving | Sat Dec 30, 2017 7:11 am

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by [email protected] » Sat Dec 30, 2017 11:45 am

Hi MY7MBA,

We're told that a discount of 20 percent on an order of goods is followed by a discount of 20 percent. We're asked for the total percent discount on the original order. This question can be solved by TESTing VALUES.

IF... the original order costs $100
the first 20% discount = $100 - (.2)($100) = $80 total cost
the second 20% discount = $80 - (.2)($80) = $64 total cost

The original cost of $100 becomes a total cost of $64 after the two discounts are applied. This is the equivalent of a (100 - 64)/100 = 36% decrease in price.

Final Answer: C

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