A wholesaler allows a trade discount of 20% off the list price of KSh 20,000 and a further 10% discount for bulk purchases applied to the reduced price. What is the net price?
Answer and explanation
Correct answer: C. KSh 14,400
- Step 1: After the first discount: 20,000 x 0.8 = 16,000. Step 2. After the second discount: 16,000 x 0.9 = KSh 14,400. Answer: KSh 14,400. Why not the others: KSh 14,000: That adds the two discounts and takes them off together. KSh 16,000: That applies only the first discount. KSh 18,000: That applies only the second discount.
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