Combining discounts

0:00- [Instructor] Let's say you walk into a store and there's a pair of shoes. And on the tag, the original price is $60. But lucky for you, there is both a sale and you have a coupon. The sale says 15% off and then your coupon says 10% off. So my question to you, is once you apply the sale and the coupon, what are you going to pay for those shoes?

0:29Pause this video and try to think about that. All right, now let's work through this together. So sometimes the devil's in the details. But most of the time, you cannot just add these two. So some of you might've said, "Oh, this is going to be 25% off and then just figure out what 25% of $60 is and then take that off, which would've been $15.

0:49So you'd be left with $45." This is not what is happening most of the time. You don't just add the percentages and take it off of the original price. What typically happens is you apply one and then you apply the other. What do I mean by that? Well, if we apply the 15% first, so if we say $60 times 15%, what is that going to be?

1:13Well, this is going to be 10% of $60 is $6. And then it's gonna be another 5%, so another half of that. So this is going to be $9 off. And so that would take our price down to $51. And now we're gonna take 10% and then we're gonna take 10% off of that, times 10%, which is equal to $5 and 10 cents.

1:41So if you take that off, that $5 and 10 cents, you are going to be left with what? If we take off $5, you'd be at $46. So this would be $45 and 90 cents. Now some of you might be saying, "Does it matter if I apply the 10% first or the 15% first?" Well, it doesn't.

2:04You can actually take the 10% off first. That would be $6 off. You would get to $54. And then once you take 15% off of that, you would get to the exact same place. The important thing to realize is the second percentage that you're taking off is not off of the original price.

2:20It's whatever is left after the original discount. To do 25%, you would have to assume that both discounts are off of the original price. So it's an important thing to keep in mind, or at least clarify when you go into the store on what type of a deal you're going to get.

2:35Let's do another scenario here. Let's imagine that instead of a percent or two percentages, we are in a scenario where for a $45 pair of pants, there is a $5 coupon and it says you can get 10% off, 10% off from sale. So how would you calculate this? So it depends on how the store is thinking about it.

3:12If they're thinking about applying the coupon first, which might very well be the case here, then what you would do, is you wouldn't take the 10% off of the $45. You would do the coupon first, so minus $5 and then you would get to $40. And then you would take the minus 10% off of this.

3:3110% of $40 is $4, so that would be minus $4 and then that would get you to $36. Now it's important to realize that's different if you went the other way around. If you did the 10% first, so if you did $45 and the first thing you did is minus 10%, 10% is $4 and 50 cents, so that would have gotten you to $41 and 50 or $40 and 50 cents, I should say, $40 and 50 cents.

4:04And then when you take your $5 coupon, so minus $5, that gets you to $35 and 50 cents. So it might not seem like a big deal. We're talking about 50 cents right over here. But if you're doing something larger, if you're talking about maybe hundreds of dollars, or even thousands of dollars, maybe this is even something involving say a car, it's good to know what order you are going to be doing things in.