Ramnarayan's salary was reduced by 3%, and then, the reduced salary was increased by 7%. By what percentage (rounded off to two decimal places) is his new salary more/less as compared to his original salary?
Show answer & explanation
Correct answer: B
Explanation
The correct answer is Option 2 i.e. 4.04% more.
Let the original salary be 1.
The salary was reduced by 3% i.e. 3.125%
⇒ New salary = 1 - 0.03125 = 0.96875 of the original salary
The salary was increased by 7% i.e. 7.4%
⇒ Now, New salary = 1 + 0.074 = 1.074 of the reduced salary
⇒ New salary compared to the original salary = 0.96875 × 1.074 = 1.0404375
⇒ The new salary = 1.0404375 - 1 = 0.0404375 times the original salary
⇒ 0.0404375 times the original salary i.e. 4.04% more.