Question

For an amount, explain why, a 20% increase followed by a 20% decrease is less than the original amount.

Answer 1

Let us assume the amount be RS. 100

⇒ x% increase in amount = amount + x/100 x amount

⇒ 20% increase in Rs.100 = 100 + 2/100 x 100

= 100 + 20

= Rs. 120

⇒ x% decrease in amount = amount - x/100 x amount

Now, 20% decrease in Rs.120 = 120 - 20/100 x 120

= 120 - 24

= Rs. 96

Hence, decreased price is less than original amount.