A price rises by 20 percent and then falls by 20 percent. How does the final price compare with the starting price?
Answer and explanation
Correct answer: C. It is 4 percent lower
- Step 1: Multiply the factors: . Step 2. The final price is 96 percent of the original, i.e. 4 percent lower. Answer: 4 percent lower. Why not the others: The second change applies to the larger new price, so the changes do not cancel; the product is below 1.
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