A shop owner offers the following discount options on an article to a customer: Successive discounts or 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 or 10% first, then successive discounts of 20% and 10% Which one of the following is correct?
- A1 only is the best option for the customer
- B(b) 2 only is the best option for the customer
- C(c) 3 only is the best option for the customer
- D(d) All the options are equally good for the customer.Correct
Explanation
Let the original price of the article be P.
Scenario 1: Successive discounts of 10% and 20%, then 10% service tax. The price after discounts is P * (1 - 0.10) * (1 - 0.20) = P * 0.90 * 0.80 = P * 0.72. The final price after service tax is (P * 0.72) * (1 + 0.10) = P * 0.72 * 1.10 = P * 0.792.
Scenario 2: Successive discounts of 20% and 10%, then 10% service tax. The order of successive discounts does not change the final discounted price. So, P * (1 - 0.20) * (1 - 0.10) = P * 0.80 * 0.90 = P * 0.72. The final price after service tax is (P * 0.72) * (1 + 0.10) = P * 0.72 * 1.10 = P * 0.792.
Scenario 3: 10% service tax first, then successive discounts of 20% and 10%. The price after service tax is P * (1 + 0.10) = P * 1.10. The final price after successive discounts is (P * 1.10) * (1 - 0.20) * (1 - 0.10) = P * 1.10 * 0.80 * 0.90 = P * 1.10 * 0.72 = P * 0.792.
In all three scenarios, the final price paid by the customer is P * 0.792. This is because the operations (multiplying by 0.90, 0.80, and 1.10) are all multiplicative, and the order of multiplication does not affect the final product.
Since the final price is the same in all options, all the options are equally good for the customer.
The final answer is D.

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