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A store increases the price of a product by 12% and then offers a discount of 12

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Question: A store increases the price of a product by 12% and then offers a discount of 12% on the new price. What is the net effect on the price?

Options:

  1. 0%
  2. 1.44% increase
  3. 1.44% decrease
  4. 2.4% increase

Correct Answer: 1.44% increase

Solution: 

Let the original price be 100. New price after increase = 100 + 12 = 112. Discount = 12% of 112 = 13.44. Final price = 112 - 13.44 = 98.56. Net effect = (98.56 - 100) / 100 * 100 = -1.44%.

A store increases the price of a product by 12% and then offers a discount of 12

Practice Questions

Q1
A store increases the price of a product by 12% and then offers a discount of 12% on the new price. What is the net effect on the price?
  1. 0%
  2. 1.44% increase
  3. 1.44% decrease
  4. 2.4% increase

Questions & Step-by-Step Solutions

A store increases the price of a product by 12% and then offers a discount of 12% on the new price. What is the net effect on the price?
Correct Answer: -1.44%
  • Step 1: Assume the original price of the product is 100.
  • Step 2: Calculate the new price after a 12% increase. This is done by multiplying 100 by 12% (which is 0.12) and adding it to the original price: 100 + (100 * 0.12) = 112.
  • Step 3: Calculate the discount on the new price of 112. This is done by multiplying 112 by 12%: 112 * 0.12 = 13.44.
  • Step 4: Subtract the discount from the new price to find the final price: 112 - 13.44 = 98.56.
  • Step 5: Calculate the net effect on the price by comparing the final price to the original price. Use the formula: (Final Price - Original Price) / Original Price * 100. This gives (98.56 - 100) / 100 * 100 = -1.44%.
  • Step 6: The net effect is a decrease of 1.44%.
  • Percentage Increase and Decrease – Understanding how to calculate the effects of a percentage increase followed by a percentage decrease on a price.
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