DebtSmart.com Thursday, May 19, 2022

Household Math: Shopping Sale

by Scott Bilker
Scott Bilker Scott Bilker is the founder of DebtSmart.com and author of the best-selling books, Talk Your Way Out of Credit Card DebtCredit Card and Debt Management, and How to be more Credit Card and Debt Smart. Receive the 5-Year Loan Spreadsheet when you subscribe to his email newsletter.

Two stores are having a sale. In Store #1 the deal is take 25% off then take an additional 25% off. In Store #2 the deal is take 50% off. Which store has the better deal? (Store #1, Store #2, Both are the same)

ANSWER
Store #2

EXPLANATION
In order to clarify what’s going on here let’s look at an example.

Say you’re buying a jacket that costs $100. In Store #1 the discount is 25%, which makes the jacket cost $75, and then you take off another 25%, which makes the jacket cost $56.25.

In Store #2 the discount is simply 50% off, which makes the jacket cost $50.

Buying the jacket in Store #2 costs $6.25 less than buying it in Store #1.