Understanding Multiple Discounts | Calculating the Final Price with Sequential or Simultaneous Discount Application

Multiple Discounts

Multiple discounts refer to a situation where more than one discount is applied to the original price of a product or service

Multiple discounts refer to a situation where more than one discount is applied to the original price of a product or service. This can occur when a retailer offers different types of discounts, such as a percentage off, a buy one get one free deal, or a coupon code. Multiple discounts can also happen when a customer qualifies for multiple promotions, such as student discounts, loyalty rewards, or special limited-time offers.

To calculate the final price after multiple discounts, it is important to understand how the discounts are applied. Generally, discounts are applied sequentially, one after the other. For example, if there is a 20% discount and then a 10% discount, the total discount can be calculated as follows:

1. Subtract the first discount: Let’s say the original price is $100. Applying a 20% discount, the $20 will be deducted, leaving $80.

2. Subtract the second discount: Now, with a 10% discount on the revised price of $80, the $8 will be deducted. The final price after both discounts will be $72.

However, it is essential to note that sometimes the discounts may be applied together, which results in a different calculation. In such cases, the discounts are applied using a different formula, such as:

Final Price = Original Price – (Original Price × Discount Percentage 1) – (Original Price × Discount Percentage 2)

This formula takes into account both discounts in a single calculation. For example, if there is a 20% discount followed by a 10% discount, the calculation would be:

Final Price = $100 – ($100 × 0.20) – ($100 × 0.10) = $100 – $20 – $10 = $70

In this scenario, the final price is $70 after both discounts are applied simultaneously.

It is crucial to carefully understand the terms and conditions of the discounts, and how they are applied, to accurately calculate the final price. Retailers often provide details on their websites or in-store to help customers understand the various discounts available and how they can be combined.

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