When the price of a watch was reduced by 20%, the number of watches sold is increased by 40%. What was the effect on the sales in percentage?

12% increase

20% = \(\frac{1}{5}\) , 40% = \(\frac{2}{5}\)

Ratio of ,           

Price          5   :   4

Quantity     5   :   7

--------------------------------

Sale         25   :   28

{ Total Sale  = Price × Number of items sold }

Increase percentage = \(\frac{3}{25}\)  × 100 = 12%