Multiple choice

A trader gave three successive discounts of 10%, 5%, and 2% on the marked price of a watch. What is the net discount?

  1. 16.21%

  2. 17%

  3. 16.5%

  4. 16%
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A Correct answer
Explanation

Successive discounts of 10%, 5%, and 2%: (1 - 0.10) * (1 - 0.05) * (1 - 0.02) = 0.9 * 0.95 * 0.98 = 0.855 * 0.98 = 0.8379. Net discount = 1 - 0.8379 = 0.1621, or 16.21%.

AI explanation

The net selling price multiplier is found by multiplying the individual multipliers: 0.90 multiplied by 0.95 multiplied by 0.98 equals 0.8379. Subtracting this from 1 gives the net discount multiplier of 0.1621. Converting this to a percentage yields a net discount of 16.21 percent.

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