If a product increases by 20% and then decreases by 20%, which statement is true about the final price?

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Multiple Choice

If a product increases by 20% and then decreases by 20%, which statement is true about the final price?

Think of each percentage change as a multiplication factor. Increasing by 20% makes the price 1.20 times its original. Then decreasing by 20% reduces that new price by 20%, which is multiplying by 0.80. The combined effect is 1.20 × 0.80 = 0.96, so the final price is 96% of the original. That means it’s 4% lower than where it started. The result isn’t equal to the original because the second change is applied to a higher base, not the original amount.

Think of each percentage change as a multiplication factor. Increasing by 20% makes the price 1.20 times its original. Then decreasing by 20% reduces that new price by 20%, which is multiplying by 0.80. The combined effect is 1.20 × 0.80 = 0.96, so the final price is 96% of the original. That means it’s 4% lower than where it started. The result isn’t equal to the original because the second change is applied to a higher base, not the original amount.

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