In: Finance
14) On a new oak bookcase with a list price of $763, a series discount of 25/30/5 is offered to wholesalers while a series discount of 10/15 is offered to retailers. (10 pts) a) What is the wholesaler’s price? b) What is the retailer's price?
a) List Price = $763
We know that,Price after discount = Price before discount x (1 - discount)
Series discount for wholesaler's: 25/30/5
discount 1 = d1 = 25%, discount 2 = d2 = 30% , discount 3 = d3 = 5%
First we calculate the Price after discount 1 by considering discount d1 on List price
Price after discount 1 = List price x (1 - d1) = 763 x (1-25%)
Now we calculate price after discount 2 by considering discount d2 on price after discount 1
Price after discount 2 = Price after discount 1 x (1-d2) = List price x (1-d1)(1-d2) = 763(1-25%)(1-30%)
Finally we find the Price after discount 3 i.e. Wholesaler's price after considering discount d3 on Price after discount 2
Wholesaler's Price = Price after discount 2 x (1-d3) = List price x (1-d1)(1-d2)(1-d3) = 763(1-25%)(1-30%)(1-5%)
Wholesaler's Price = 763 x 75% x 70% x 95% = 763 x 49.875% = 380.54625 = $380.55 (rounded to two places off decimal)
b) List Price = $763
We know that,Price after discount = Price before discount x (1 - discount)
Series discount for Retailer's: 10/15
discount 1 = d1 = 10%, discount 2 = d2 = 15%
First we calculate the Price after discount 1 by considering discount d1 on List price
Price after discount 1 = List price x (1 - d1) = 763 x (1-10%)
Now we calculate price after discount 2 i.e retailer's price by considering discount d2 on price after discount 1
Retailer's Price = Price after discount 1 x (1-d2) = List price x (1-d1)(1-d2) = 763(1-10%)(1-15%)
Retailer's Price = 763 x 90% x 85% = 763 x 76.50% = 583.695 = 583.70 (rounded to two places off decimal)