A toy store regularly sells.....

[pzazz12]

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

[shovan85]

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

[Brent@GMATPrepNow]

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

We can save some time by using the fact that the answer choices are spread out nicely (see video below for more on this).

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