Question

A number is first increased by 20% and then the result is decreased by 20%. What is the net percentage change?

• A. 4% increase
• B. No change
• C. 4% decrease
• D. 2% decrease

Hint:

Equal % up then down never cancels; multiply 1.2 by 0.8.

Answer 1

The Correct Option is C

Step 1: Represent the successive changes as multipliers.
Increase by 20%: multiply by \(1.20\). Decrease by 20%: multiply by \(0.80\).
Step 2: Combine.
\[1.20 \times 0.80 = 0.96\] Step 3: Interpret.
The final value is \(0.96\) of the original, i.e. a \(1 - 0.96 = 0.04 = 4\%\) drop. Net change \(= \boxed{4\% \text{ decrease}}\).