ANSWER: July Problem of the Month

a)  How much is the discount, under the terms of this sale, for a bundle of clothes with retail value of $250?

Discount = $130. You get this as follows:

1st)  Take a 20% discount off $250 by multiplying 250 by .8.

Answer is a $50 discount, making the new selling price $200, $250-$200.

Take a 40% discount off the new selling price of $200 by multiplying 200 by .6.

Answer is an $80 discount, making the new and final selling price $120, $200 – $80.

Total discount is the sum of the two discounts:  $130 = $50 + $80.

 

b)  How much would the discount be if Al’s had just run a straight 60% discount sale?

At a straight 60% discount, the dollar value of the discount would be $150, which you get by multiplying $250 by .6.

 

c)  Why do you think that Al’s is running the sale in this way?

Many possible answers, but the main point is that Al’s strategy is to make customers think they are getting 60% off, while he actually gives them less than 60% off. He actually gives them a 52% discount.

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