SAT Math · Percentages · medium
A price is increased by 20% and then the new price is decreased by 25%. What is the overall percent change from the original price?
A price is increased by 20% and then the new price is decreased by 25%. What is the overall percent change from the original price?
Answer and explanation
Answer: B: A 10% decrease
Use multipliers. A 20% increase multiplies the price by , and a 25% decrease multiplies by . The overall multiplier is , which is a 10% decrease, choice B. Try $100: it rises to $120, then falls by 25% of 120, which is $30, giving $90. Choice A (a 5% increase) comes from computing with a sign slip. Choice C (no change) assumes the percents cancel, but the 25% applies to a larger amount. Choice D (a 45% decrease) adds the percents, . Successive percent changes multiply; they do not add.
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