What is the single equivalent price increase for two successive price increase of 5% and 8% on an item?
Answer & explanation
Correct answer: option 1
Formula used:
Two successive increase of a%, b% = $\frac{100+a}{100} \times \frac{100+b}{100}$
Single price equivalent price increase for 5%, 8% = $\frac{100+5}{100} \times \frac{100+8}{100}$
= $\frac{11340}{10000}$ = 13.4% increase