A shop owner offers the following discount options on an article to a customer: 1. Successive discounts of $10\%$ and $20\%$, and then pay a service tax of $10\%$. 2. Successive discounts of $20\%$ and $10\%$, and then pay a service tax of $10\%$. 3. Pay a service tax of $10\%$ first, then successive discounts of $20\%$ and $10\%$. Which one of the following is correct?

All the options are equally good for the customer.

1 only is the best option for the customer.

2 only is the best option for the customer.

3 only is the best option for the customer.

All the options are equally good for the customer.

QUESTION

CSAT

Hard

Maths

Prelims 2020

A shop owner offers the following discount options on an article to a customer:

Successive discounts of $10\%$ and $20\%$ , and then pay a service tax of $10\%$ .
Successive discounts of $20\%$ and $10\%$ , and then pay a service tax of $10\%$ .
Pay a service tax of $10\%$ first, then successive discounts of $20\%$ and $10\%$ .

Which one of the following is correct?

Select an option to attempt

Explanation

Let the base price be Rs. 100.

Condition 1: After the 1st discount: $100 - (10\% \times 100) = 100 - 10 = \text{Rs}. 90$ After the 2nd discount: $90 - (20\% \times 90) = 90 - 18 = \text{Rs}. 72$ After adding Service tax: $72 + (10\% \times 72) = 72 + 7.2 = \text{Rs}. 79.2$

Condition 2: After the 1st discount: $100 - (20\% \times 100) = 100 - 20 = \text{Rs}. 80$ After the 2nd discount: $80 - (10\% \times 80) = 80 - 8 = \text{Rs}. 72$ After adding Service tax: $72 + (10\% \times 72) = 72 + 7.2 = \text{Rs}. 79.2$

Condition 3: After adding Service tax first: $100 + (10\% \times 100) = 100 + 10 = \text{Rs}. 110$ After the 1st discount: $110 - (20\% \times 110) = 110 - 22 = \text{Rs}. 88$ After the 2nd discount: $88 - (10\% \times 88) = 88 - 8.8 = \text{Rs}. 79.2$