The price of an article is first increased by 20% and subsequently decreased by 25% due to reduction in sales. Find the net percentage change in price of the article.
Answer & explanation
Correct answer: option 1
We have,
Price of a mobile is first increased by 20% and later decreased by 25%
Let's assume the original price of the mobile is 100.
When the price is increased by 20%, it becomes 100 x 1.20 = 120.
Then, when the price is decreased by 25%, it becomes
= 120 * (1 - 0.25) = 90.
Final price of the mobile is
= (90 - 100) / 100 * 100 = -10%.
So, the final price is decreased by 10% compared to the original price.