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Difficulty: MediumPercentage Change, Markups, and Discounts

An office manager is purchasing a commercial printer with a regular retail price of $1,200.00\$1,200.00. The store is offering a 20%20\% discount on all electronics. Using a corporate account, the manager receives an additional 10%10\% discount applied to the reduced sale price. Finally, a 5%5\% sales tax is added to the discounted total. What is the final total cost of the printer in dollars?

Answer: 907.2 dollars

Answer

The final total cost of the printer is $907.20\$907.20.
The correct answer is derived by first taking 20%20\% off the $1,200.00\$1,200.00 base price to get $960.00\$960.00. Then, the 10%10\% corporate discount is taken off the $960.00\$960.00, bringing the subtotal down to $864.00\$864.00. Lastly, a 5%5\% tax on the $864.00\$864.00 subtotal adds $43.20\$43.20, resulting in a final cost of $907.20\$907.20.

Step-by-Step Solution

1
Calculate the price after the initial 20%20\% electronics discount.
$1,200.00−($1,200.00×0.20)=$1,200.00−$240.00=$960.00\$1,200.00 - (\$1,200.00 \times 0.20) = \$1,200.00 - \$240.00 = \$960.00
The first discount is applied to the original retail price of the printer.
2
Calculate the price after the additional 10%10\% corporate discount.
$960.00−($960.00×0.10)=$960.00−$96.00=$864.00\$960.00 - (\$960.00 \times 0.10) = \$960.00 - \$96.00 = \$864.00
Successive discounts are calculated based on the previously reduced price, not the original price.
3
Calculate the 5%5\% sales tax on the final discounted price and add it to the total.
$864.00×0.05=$43.20\$864.00 \times 0.05 = \$43.20. Total = $864.00+$43.20=$907.20\$864.00 + \$43.20 = \$907.20
Sales tax is always applied to the final discounted sale price before checkout.

Key Concept

Successive discounts must be applied sequentially to the new reduced price at each step, and sales tax is computed on the final discounted price.
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Topics

Percentage Change, Markups, and Discounts

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