The formula
is the sale price, the original price, and , the discounts as decimals (25% is 0.25).
Where it comes from
Taking 25% off leaves 75% of the price, so a single discount multiplies the price by . A second discount like “an extra 10% off” applies to the already reduced price, not the original. So it multiplies again by .
That means stacked discounts don’t add. The total discount is
which is always a bit less than . The term is the second discount’s share of money already taken off.
Worked example
An $80 item, 25% off, then an extra 10%:
You save $26, a total discount of 32.5%, not the 35% the signs suggest.
Watch out for
- Order doesn’t matter. 25% then 10% gives the same price as 10% then 25%, because multiplication doesn’t care about order.
- Dollar-off coupons do. “$10 off, then 20% off” gives a different price from “20% off, then $10 off”. Check which one the store applies first.
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