Find the single discount equivalent to two successive discounts of 20% and 10%.
.80 * .90 = .72
so how much discount is that?
To find the single discount equivalent to two successive discounts, we need to use the formula:
Single discount rate = 1 - [(1 - discount rate 1) * (1 - discount rate 2)]
In this case, the first discount rate is 20% (0.20) and the second discount rate is 10% (0.10).
Substituting these values into the formula:
Single discount rate = 1 - [(1 - 0.20) * (1 - 0.10)]
= 1 - [0.80 * 0.90]
= 1 - 0.72
= 0.28.
Therefore, the single discount equivalent to two successive discounts of 20% and 10% is 28%.