2012-07-06 09:00:54

A certain fruit stand has a new shipment of oranges coming in on Wednesday. As such, it discounts the prices of the oranges it currently has by 20% each day to make room for the new oranges. If on Sunday, oranges cost $1.50 each, how much did five oranges cost on Tuesday?

A) $.30
B) $1.20
C) $3.50
D) $4.80
E) $6.00

The correct answer is D

Explanation: Start by finding the price of an individual orange on Tuesday. If oranges were $1.50 each on Sunday and decreased by 20% each day, then on Monday, they would have sold for 80% of $1.50 (since a 20% reduction in price is equivalent to 80% of the price, since 100% - 20% is 80%). 80% of $1.50 is $1.20. On Tuesday, this price would have decreased an additional 20%, meaning the Tuesday price is 80% of $1.20, or $.96. This is the price of an individual orange.

The question asks about the price of 5 oranges, so take the price of one orange, and multiply it by 5: $.96 x 5 = $4.80, making choice D correct.