The price of an item first increases by 20% and then decreases by 20% from the new price. What is the net percentage change in the original price of the item?
Show answer & explanation
Correct answer: C
Explanation
The correct answer is option 3 i.e. -4%.
Let the original price be 100.
- Increase by 20% → New price = 100 + 20 = 120
- Decrease by 20% on 120 → 20% of 120 = 24
- So, new price = 120 − 24 = 96
Now compare with original price:
Change = 96 − 100 = −4
Percentage change = (−4 / 100) × 100 = −4%