A department store sells logo shirts at an original price of $20. Every month that a shirt doesn’t sell, the store reduces the selling price by 25%. The store employees get a 50% markdown off the current price. Macy works at the store and sees the shirts going into the second markdown month. She decides that since 25% + 25% + 50% = 100%, the shirts must be free to employees. What is Macy’s error?
Answers
Given : A department store sells logo shirts at an original price of $20. Every month that a shirt doesn’t sell, the store reduces the selling price by 25%. The store employees get a 50% markdown off the current price.
Macy works at the store and sees the shirts going into the second markdown month. She decides that since 25% + 25% + 50% = 100%, the shirts must be free to employees.
To Find : What is Macy’s error?
Solution:
Discounts are successive .
Successive discount is the discount offered on the price after discount.
It is similar to compound interest (interest offered on amount + interest).
Second discount will be on the price after 1st discount
and not on Original Price.
Original Price = 20 $
25 % Discount = (25/100)20 = 5 $
Price after 1st Discount = 20 - 5 = 15 $
Next discount will be on 15 $
25 % Discount = (25/100)15 = 3.75 $
Price after 2nd Discount = 15 - 3.75 = 11.25 $
Now 50 % mark down for store employee will be on 11.25 $
50 % = (50/100)11.25 = 5.625 $
Final Price = 11.25 - 5.625 = 5.625 $
shirts available for 5.625 $ for store Employees , not free
Total Discount = (20- 5.625/20) * 100 = 71.875 %
Further Discounts are on reduced prices but Macy calculated on original price that was Macy's error.
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Answer:
Macy was calculating the employee price off the original amount each time instead of off the new selling price each month. Macy cannot add up all the discounts; she must apply them one by one.
Step-by-step explanation: its the sample response