Question

A department store sells logo shirts at an original price of $20. Every month that a shirt doesn’t sell, the store reduces the selling price by 25%. The store employees get a 50% markdown off the current price. Macy works at the store and sees the shirts going into the second markdown month. She decides that since 25% + 25% + 50% = 100%, the shirts must be free to employees. What is Macy’s error?

Answer 1

Answer: The pre-tax price of the shirt for Macy will be $5.63

Explanation:

Given:

Original price = 20

reduces selling price by 25% every month it's not sold.

First markdown month:

20 * (100%-25%) = 20 * 75% = 15

Second markdown month

15 * 75% = 11.25

Macy, employee gets a 50% discount off the current price.

11.25 * 50% = 5.625

11.25 - 5.625 = 5.625 or 5.63

hope it helps! :)

Answer 2

teacher's response

Explanation:

Macy was calculating the employee price off the original amount each time instead of off the new selling price each month. Macy cannot add up all the discounts; she must apply them one by one.