Question

If the price of an article is decreased by 20% and then the new price is increased by 25%, then what is the net change in the price ?
(a) 0%
(b) 5% increase
(c) 5% decrease 5
(d) Cannot be determined due to insufficient data​

Answer 1

Answer:

b) 5% net change after 20% decrease and 25% increase i.e 25%-20%=5%

Answer 2

Given,

If the price of an article is decreased by 20%.

Then new price is increased by 25%.

Solution,

Calculate the net change in the price.

Consider the price is x.

The price of an article is decreased by 20%.

$\[\begin{array}{l} = x - 20\% x\\ = x - \frac{{20}}{{100}}x\\ = x - 0.2x\\ = 0.8x\end{array}\]$

This new price is increased by 25%.

$\[\begin{array}{l} = 0.8x + .25 \times 0.8x\\ = 1.25 \times 0.8x\\ = 1x\end{array}\]$

Net change in price.

$\[\begin{array}{l} = x - x\\ = 0\end{array}\]$

Hence the net change in price is $\[0\% \]$

The correct option is (a), i.e. $\[0\% \]$.