A toy store regularly sells all stock at a discount of 20 percent to 40 percent. If an additional 25 percent were deducted from the discount price during a special sale, what would be the lowest possible price of a toy costing $16 before anu discount?
A. $5.60
B. $7.20
C. $8.80
D. $9.60
E. $15.20
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A toy store regularly sells.....
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shovan85
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When shall we get the lowest value of an item? When it is sold for 40% and then again 25% of discount on the item price.
So we have the starting cost as $16.
After discounting 40% we will have the price as 16*(1-0.4) = $9.6
Again after discounting 25% we will have the price as 9.6(1-0.25) = $7.2
IMO B
So we have the starting cost as $16.
After discounting 40% we will have the price as 16*(1-0.4) = $9.6
Again after discounting 25% we will have the price as 9.6(1-0.25) = $7.2
IMO B
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Brent@GMATPrepNow
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We can save some time by using the fact that the answer choices are spread out nicely (see video below for more on this).pzazz12 wrote: ↑Sat Oct 23, 2010 4:28 amA toy store regularly sells all stock at a discount of 20 percent to 40 percent. If an additional 25 percent were deducted from the discount price during a special sale, what would be the lowest possible price of a toy costing $16 before anu discount?
A. $5.60
B. $7.20
C. $8.80
D. $9.60
E. $15.20
To get the LOWEST possible price (after the two discounts), we must apply the biggest discount (which is a 40% discount)
So, AFTER the 40% discount, customers will pay 60% of the original price.
60% of $16 = (0.6)($16) = $9.60
So, the discounted price is $9.60
From here, we need to apply an additional 25% discount on $9.60
HOWEVER, before we do this, we should recognize that the answer choices are quite spread apart.
So, we can be somewhat aggressive with our estimation.
AFTER the additional 25% discount, customers will pay 75% of the original price.
So, we need to calculate 75% of $9.60.......yuck!
Let's find 75% of $10.00 instead (close enough, right?)
75% of $10.00 = $7.50
So, if 75% of $10.00 is $7.50, then 75% of $9.60 will be a bit less than $7.50
Only answer choice B works.
Answer: B
Cheers,
Brent
Brent Hanneson - Creator of GMATPrepNow.com
