The price of an item is increased by 25% and then reduced by 25%. What is the net change in the price?
Answer and explanation
Correct answer: D. -6.25%
- Step 1: Net factor = 1.25 × 0.75 = 0.9. Step 2. Change = (0.9 − 1) × 100 = -6.25%. Answer: -6.25%. Why not the others: 0% is what you get if you add and subtract the percentages directly. 25% is what you get if you ignore the reduction. -25% is what you get if you ignore the increase.
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