Question

A property company sold 20% more houses in 2007 than in 2006. If the company sold 426 houses in 2007, calculate how many houses it sold in 2006..

Answer 1

Here's how to work this type of problem. If the company sells A items in year 1, and then sells x% more in year 2, the amount sold in year two is equal to the amount sold in year 1 plus 25% more:

B = A + x% x A = A(1+x)

For example: if you sell 60 units in year 1, and sales increase 25% in year 2, then the amount sold in year 2 is 60 x (1+ 0.25) = 75 units.

Now turn it around - if the company sold 75 units in year 2, and you are told this is a 25% gain from year 1, then the amount sold in year 1 was 75/(1.25) = 60.