Taking an extra 5% off of the 15% discount is not the same as a 20% discount because the discount is compounded.
For example, if you make a $1,000 purchase and take 15% off, that comes to $850. Then if you take another 5% off of the $850, that's a $42.50 discount, making your final price $807.50, which is not the same as taking off 20%, which would result in a final price $800.
Math is fun. I understand (and have made) your argument a number of times -- it's a real hit at parties! At the basest level though, when not dealing with economists as your primary audience, 20% is "an extra" 5% over the typical 15%.
More semantics than anything else in a forum such as this. I will be more clear next time though! ;-)
In fact, I think I'll have an opportunity to rectify this with another deal later today.
Taking an extra 5% off of the 15% discount is not the same as a 20% discount because the discount is compounded.
ReplyDeleteFor example, if you make a $1,000 purchase and take 15% off, that comes to $850. Then if you take another 5% off of the $850, that's a $42.50 discount, making your final price $807.50, which is not the same as taking off 20%, which would result in a final price $800.
No tweet for you!
@Keith,
ReplyDeleteMath is fun. I understand (and have made) your argument a number of times -- it's a real hit at parties! At the basest level though, when not dealing with economists as your primary audience, 20% is "an extra" 5% over the typical 15%.
More semantics than anything else in a forum such as this. I will be more clear next time though! ;-)
In fact, I think I'll have an opportunity to rectify this with another deal later today.
Thanks Keith!