The increase in the price of a certain item was 25%. Then the price was decreased by 20% and then again increased by 10%. What is the resultant increase in the price?
- (a) 5%
- (b) 10% ✓ UPSC's answer
- (c) 12·5%
- (d) 15%
Why the answer is (b)
• Let the initial price of the item be 100.
• After a 25% increase, the price becomes 100 + 25 = 125.
• A subsequent 20% decrease on 125 is 25, making the new price 125 - 25 = 100.
• A final 10% increase on 100 is 10, resulting in a final price of 110.
• The net change is from 100 to 110, which is a 10% increase.
• Therefore, the resultant increase in the price is 10%.
Why the other options are wrong
- (a) 5%
- 5% is incorrect because the final price is 110, representing a 10% increase, not 5%.
- (c) 12·5%
- 12.5% is incorrect because the final price is 110, representing a 10% increase, not 12.5%.
- (d) 15%
- 15% is incorrect because the final price is 110, representing a 10% increase, not 15%.
Asked in the CSAT Paper II of the UPSC Civil Services Preliminary Examination 2022, held on 5 June 2022. Question and answer key: Union Public Service Commission. Explanation: UPSC Answer Check.