The price of a car is first increased by 35% and after that the price is decreased by 25% due to reduction in sales. What is the net percentage change in final price of the car?
Show answer & explanation
Correct answer: D
Explanation
The correct answer is Option 4 i.e. Increases by 5/4%.
The price of a car is first increased by 35% and after that, the price is decreased by 25%
Let the initial price of the car be x.
When the price of the car is increased by 35%
The new price of the car = x + 35x/100 = 135x/100
Now the price of the car is reduced by 25%.
The new price of the car = 135x/100 - 135x/100 × 25/100 = 135x/100 - 135x/400 = 405x/400
405x/400 > x
There is an increase in the price of the car.
Percentage change = [(405x/400) - x]/x × 100% = 5 × 100/400 = 5/4%