GMAT Math : Calculating discounts

Study concepts, example questions & explanations for GMAT Math

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Example Questions

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Example Question #1 : Calculating Discounts

A refrigorator is on sale for 20% off the original price. A store-wide sale results in an additional reduction of 25%. What is the total discount based on the original price?

Possible Answers:

60%

55%

45%

40%

Correct answer:

40%

Explanation:

Let  equal the original price.

First discount: (sale price).

Second discount: (final sale price)

Therefore, the final price is 60% of the original price. To calculate the discount:

or 40%

Example Question #2 : Calculating Discounts

Carolyn won a $450 gift card, and she wants to spend it at the store where she works. Normally, she gets a 10% employee discount, but in one week, her store will be having an "Employee Appreciation Day" during which a 25% employee discount will apply. If, as an employee, she does not have to pay sales tax, how much more worth of merchandise (in terms of price before discount) will she be able to purchase by holding out to that day (nearest cent, if applicable)?

Possible Answers:

Correct answer:

Explanation:

Let  be the price before discount of the merchandise Carolyn can purchase now using her 10% discount. Then Carolyn will pay 90% of that price, or . Set up and solve the equation:

So Carolyn can use that gift card to purchase $500 worth of merchandise now.

Now let  be the price before discount of the merchandise Carolyn can purchase during Employee Appreciation Day using a 25% discount. Then Carolyn will pay 75% of that price, or . Set up and solve the equation:

So Carolyn can use that gift card to purchase $600 worth of merchandise on Employee Appreciation Day.

Carolyn can save $100 by holding out.

Example Question #3 : Calculating Discounts

The following is a partial menu at Moonbucks Coffee.

Today, Moonbucks is running a special - buy one drink and get one of equal or lesser value free.

Charles is buying drinks for his family. He orders three lattes, two cappucinos, two espressos, and a Turkish coffee. How much will he pay for the drinks, disregarding tax?

Possible Answers:

None of the other choices are correct.

Correct answer:

Explanation:

 List the prices of the drinks in descending order:

With the most expensive drink, Charlie will get the second-most expensive drink free; with the third-most expensive drink, he will get the fourth-most expensive drink free; and so forth.  

 

Charlie will only pay for the first, third, fifth, and seventh most expensive drinks. Add their prices.

Example Question #4 : Calculating Discounts

Wally has a $500 gift card that he wants to spend at the store where he works. He gets a 25% employee discount, and the sales tax rate is 6.45%. How much can Wally spend before the discount and tax using only his gift card? (Round to the nearest cent.)

Possible Answers:

None of the other answers are correct.

Correct answer:

Explanation:

Let  be the price of the merchandise before discount and tax are figured in. 

A 25% discount means that the price Wally pays is of the retail price.  This can be written as .

A 6.45% sales tax means that  of that discounted price is being paid.

We can combine the discount and sales rate as .

As the maximum purchase price after discount and tax is $500, we set up the following equation:

Wally can purchase up to $626.27 in merchandise.

Example Question #5 : Calculating Discounts

Vanessa purchased an mp3 player, originally priced at $290, but discounted by $27. Approximately what percent discount did Vanessa receive on the mp3 player? 

Possible Answers:

 

Correct answer:

 

Explanation:

27 is a little less than 29, which is 10% of $290. Therefore, 9% is the closest approximation. 

Example Question #6 : Calculating Discounts

The following is a partial menu at Moonbucks Coffee:

Jim is allowed to use his 20% employee discount on up to four drinks per day. Assuming he has not used the discount yet today, Jim wants to purchase three Americanos, a Turkish coffee, and a latte. After the discount, what will the drinks cost him? (Disregard tax).

Possible Answers:

Correct answer:

Explanation:

The 20% discount will apply to the four most expensive drinks, presumably, so he will pay 20% less - or 80% - for the Turkish coffee, the latte, and two of the Americanos, and full price for the third Americano.

The price he will pay is as follows:

He will pay $11.26 for the drinks.

Example Question #7 : Calculating Discounts

The above is the menu at Monorail Sandwich Shop. 

Kyle works at Monorail and is therefore allowed to buy up to four sandwiches and four sodas a day with his 25% employee discount. If he buys more than the allowed number with any one purchase, he can take 25% off the four highest-priced sandwiches and the four highest-priced sodas.

Kyle is buying three turkey sandwiches, three ham sandwiches, and six large sodas. If this is Kyle's first purchase of the day, how much will he pay, disregarding tax?

Possible Answers:

Correct answer:

Explanation:

Kyle is buying six sandwiches and six large sodas, so his discount will apply to four of the sodas and the four highest-priced sandwiches - namely, the three turkey sandwiches and one ham sandwich.

The price of those eight items, before discount, is

.

A 25% discount means that Kyle will pay 75% of this, or 

.

The items for which Kyle will pay full price - two ham sandwiches and two large sodas - cost 

.

The total cost to Kyle:

Example Question #76 : Gmat Quantitative Reasoning

A restaurant owner allows employees to purchase meals for 28% off list price.  An employee purchases a meal with a list price of $16.50.  What does she pay for the meal?

Possible Answers:

Correct answer:

Explanation:

If she gets a 28% discount, she pays 72% of the list price:

Example Question #8 : Calculating Discounts

A clothing store offers a dress initally at $100. Then one week later, the store offers the dress at 15% off. The dress still doesn't sell, so after another week, the store reduces its new price by 20%. How much does the dress cost now?

Possible Answers:

$65

$69

$60

$68

$66

Correct answer:

$68

Explanation:

For the first discount, we have . So the dress is worth $85

 

After the second discount, we have 

So the final dress price is $68

Example Question #9 : Calculating Discounts

Julie has a choice between purchasing a hat at Stacy's or purchasing an identical hat at Gumble's. The hat at Stacy's costs $350. The hat at Gumble's normally costs $425, but it is on sale at 20% off. The sales tax is 7.5% for both stores. At which store can Julie get the hat cheaper, and how much will she save?

Possible Answers:

Julie saves $10.00 by going to Gumble's.

Julie saves $155.88 by going to Stacy's.

Julie saves $145.00 by going to Stacy's.

More information is needed to answer the problem.

Julie saves $10.75 by going to Gumble's.

Correct answer:

Julie saves $10.75 by going to Gumble's.

Explanation:

If Julie purchases the hat at Stacy's, she will spend $350 plus 7.5% of this as tax - that is, she will spend 1.075 times $350:

.

 

If Julie purchases the hat at Gumble's, her price before tax will be 20% off of the price of $425 - this is 80% of, or 0.80 times, $425:

Adding 7.5% tax, Julie will spend 1.075 times $340:

.

By going to Gumble's, she saves

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