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

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?

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.