A retailer offers the following discount schemes for buyers on an item.
i) Two successive discount of 20%.
ii) A discount of 25% followed by a discount of 15%.
iii) A discount of 40%.
Under which scheme(s) will the selling price be minimum?

To minimize the selling price, the effective discount offered must be maximized. Let's calculate the single equivalent discount for each scheme:
Scheme (i): Two successive discounts of 20%

Equivalent Discount=20+20−
100
20×20
​
=40−4=36%
Scheme (ii): Successive discounts of 25% and 15%

Equivalent Discount=25+15−
100
25×15
​
=40−3.75=36.25%
Scheme (iii): A single discount of 40%

Equivalent Discount=40%
Comparing the equivalent discounts: 40%>36.25%>36%.
Since Scheme (iii) provides the highest total discount, it results in the minimum selling price.