To find which scheme gives the maximum discount, compute the net discount for successive discounts using:
Net Discount=a+b−100ab
(where (a%) and (b%) are successive discounts)
I: 20% and 20%
20+20−10020×20=40−4= 36%
II: 25% and 15%
25+15−10025×15=40−3.75 = 36.25%
III: 30% and 10%
30+10−10030×10=40−3 = 37%
IV: 5% and 35%
5+35−1005×35=40−1.75= 38.25%
Maximum discount is offered by Scheme IV (38.25%)