Understanding Discounts and Their Impact on Final Price

Introduction to Discount Calculation

In today's competitive market, understanding how discounts work can significantly help consumers save money. This article will guide you through the process of calculating the final price of an item when multiple discounts are applied. Understanding this can be particularly useful in scenarios where a company offers a 20% discount on an item and an additional 10% discount if the customer pays in cash. For example, if the original price of the item is 100, what would be the final price if the customer pays in cash? We will break down the steps involved in such a calculation to ensure clarity and accuracy.

Step-by-Step Calculation

For the given scenario, where a customer gets a 20% discount and an additional 10% discount for paying in cash, we will follow these steps to determine the final price. 1. **Apply the Initial 20% Discount**:
Starting with the original price of 100, the first discount is 20%. To apply this discount, we calculate 20% of 100 and then subtract it from the original price.
20% of 100 is calculated as:

20/100 × 100 20
Subtracting this from 100, we get:

100 - 20 80
Thus, the price after the first discount is 80. 2. **Apply the Additional 10% Discount (for Cash Payment)**:
Next, we apply the additional 10% discount to the newly discounted price of 80. This discount is for customers who pay in cash. So, we calculate 10% of 80 and subtract it from 80.

10/100 × 80 8
Subtracting this from 80, we get:

80 - 8 72
Thus, the final price after both discounts is 72.

Final Price Calculation Formula

Using the formula for the final price calculation, where the original price is 100, and we apply both discounts in sequence, we can express the final price as follows:

Final Price Original Price - (First Discount) - (Second Discount)
100 - (20/100 × 100) - (10/100 × (100 - 20/100 × 100))
100 - 20 - (10/100 × 80)
100 - 20 - 8
100 - 28
72

Conclusion and Practical Application

Understanding how discounts accumulate and affect the final price is crucial for savvy consumers. In the example provided, a customer can save a significant amount by taking advantage of both the initial discount and the additional loyalty discount for paying in cash. This knowledge can be applied to various shopping scenarios, helping individuals make informed decisions and maximizing their savings. By following the step-by-step calculation method, you can easily determine the final price of an item after applying multiple discounts. This method involves simple arithmetic and ensures that you can confidently navigate through discount offers and calculate the savings accurately.

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