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Question

Difficulty: HardDiscounts and Sale Prices

A contractor purchases a bulk order of electrical wiring from a wholesale supply store. The store offers a 25%25\% discount on all orders over $500\$500. Because the contractor is a loyal member, they receive an additional 10%10\% off the already discounted price. After both discounts are applied, an 8%8\% sales tax is added. If the original price of the electrical wiring order was $800\$800, what is the final total amount the contractor pays?

  1. A
    $561.60\$561.60
  2. $583.20\$583.20Answer
  3. C
    $604.00\$604.00
  4. D
    $826.20\$826.20

Answer

The final total amount the contractor pays is $583.20\$583.20.
The final amount must be calculated sequentially. First, apply the 25%25\% discount to $800\$800, resulting in $600\$600. Then, apply the 10%10\% loyal member discount to $600\$600, resulting in $540\$540. Finally, calculate 8%8\% sales tax on the $540\$540 final price ($540×0.08=$43.20\$540 \times 0.08 = \$43.20) and add it to the price to get $\$583.20.

Step-by-Step Solution

1
Calculate the first 25%25\% discount on the original $800\$800 price.
$800×0.25=$200\$800 \times 0.25 = \$200 discount. The new price is $800−$200=$600\$800 - \$200 = \$600.
The first discount is applied to the original wholesale price.
2
Calculate the second 10%10\% loyal member discount on the new price of $600\$600.
$600×0.10=$60\$600 \times 0.10 = \$60 discount. The new price is $600−$60=$540\$600 - \$60 = \$540.
Successive discounts are always applied to the previously discounted amount, not the original price.
3
Calculate the 8%8\% sales tax on the final discounted price and add it to the total.
$540×0.08=$43.20\$540 \times 0.08 = \$43.20 tax. The final total is $540+$43.20=$583.20\$540 + \$43.20 = \$583.20.
Sales tax is applied to the final amount after all discounts have been deducted.

Key Concept

Calculating successive discounts and applying sales tax to the final discounted price.
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Topics

Discounts and Sale Prices

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