I am making an artificer that is optimized for making items. I currently have Extraordinary Artisan (-25% price), apprenticeship(-10% price) and mercantile background(-25% price, DM allowed me to buy materials as a single item).
The DM and I got into a discussion as to how discounts would stack. He is saying that it makes sense for discounts to stack multiplicatively (.75*.75*.9 = .506), but I told him that like any multipliers in 3.5 they stack additively ( 1 + (.75 - 1) + (.75 - 1) + (.9 - 1) = .40)
Which one is right?
As stated by SevenSidedDie, real-world values are subject to real math, so the question falls to whether discounts apply all to the same value (like in simple interest):
if something costs 1k, I would get 25% off of 1k, then 25% off of 1k, then 10% off of 1k = 1k - 250 - 250 - 100 = 400
or if they apply one at a time (like in compound interest):
if something costs 1k, I would get 25% off of (25% off of (10% off of 1k)) = 1k * .75 * .75 * .9 = 506