Damaged items are marked down 20% to 40%. A newspaper coupon entitles the coupon holder additional 15% markdown. What is the lowest price of a damaged item that was originally marked $36?


What I did was 0.85(0.6(36) ) = 18.36

But the explaination says total discount is 40+15 == 55%

so 0.45(36) = 16.20

Can we add successive discounts like this to get the lowest price? How is this different from successive increases or decreases which we should not add together?

Please can someone answer this so I learn to distinguish?

Unique, the problem with this question is not your calculation but the ambiguity of the question itself. You interpreted the question as stating that the additional 15% is applied after the 40% markdown. The explanation provided, however, assumes that the additional 15% is simply added to the damage markdown before any discounts are calculated. I tend to agree with your interpretation and also would have arrived at a final price of $18.36

Fortunately, the Official GMAT will not include such ambiguous wording, as every Official GMAT question has been extensively evaluated and tested (as an experimental question). As long as you read each question carefully, you will have no doubt what the question is asking.

-dan