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Worked solution
Read what the £96 is
£96 is the price after BOTH discounts. The original price is unknown, and neither discount was a percentage of £96, so this is a reverse percentage problem.
Name the first multiplier
The first discount multiplies the original price by 0.75.
Name the second multiplier
The further 20% is taken off the already-reduced price, so it multiplies that price by 0.8.
Combine the multipliers
Applying one multiplier and then the other is the same as multiplying by 0.6.
Say what the combined multiplier means
The customer pays 60% of the original price, so the saving is 40% — not the 45% the customer claims, and not the % the advert seems to promise.
Write the relationship
The original price, multiplied by 0.6, gives the £96 paid.
Divide to find the original price
The coat was £160 before any discount.
Round-trip check the first discount
Taking 25% off £160 gives £120.
Round-trip check the second discount
Taking a further 20% off £120 gives £96, exactly what the customer paid. The original of £160 is confirmed.
Find the saving in money
The customer saved £64 altogether.
Work out the actual percentage saved
The saving is 40% of the original price. The customer's claim of 45% is wrong.
Explain why the customer is wrong
The first discount saved £40, but the second saved only £24, because it was 20% of the reduced £120 — not 20% of the original £160 (which would be £32). Adding the percentages, , assumes both were taken from £160, and they were not.
Check the two savings add up
The two separate savings total £64, which matches the overall saving. Everything is consistent.
Check the claimed 45% fails
A genuine 45% saving on £160 would have left the customer paying £88, not £96. The customer paid £8 more than a 45% saving would give.
State the answer
The actual saving is 40% of the original price of £160, not 45%.