What single rate of discount would be equivalent to a series of 15% / 8% / 4%?
A) 48.0%
B) 27.0%
C) 24.9%
D) 9.99%
E) 21.4%

Question

Quizplus · Accepted Answer

To find the single equivalent discount rate for a series of discounts, we use the formula for successive discounts: $1 - (1 - d_1)(1 - d_2)(1 - d_3)$, where $d_1, d_2, d_3$ are the decimal forms of the discounts. For 15%, 8%, and 4%, the calculation is $1 - (1 - 0.15)(1 - 0.08)(1 - 0.04) = 1 - (0.85)(0.92)(0.96) = 1 - 0.7512 = 0.2488$, or 24.88%, which rounds to 24.9%.

What Single Rate of Discount Would Be Equivalent to a Series