energetics wrote:
The price of an item is reduced by $5.00, a 20-percent decrease. If the new price is then increased by 20-percent, what is the final price of the item?
A) $30.00
B) $25.00
C) $24.00
D) $20.00
E) $4.00
My very first thought was to work backwards. However, this isn't going to work here. The problem is that the answer choices represent the
final price, rather than the original price that we'll be increasing and decreasing. The original price that we start with is unknown, so we can't really work backwards.
So, let's use some logical reasoning instead. $5 is 20 percent, or 1/5, of the original price. Therefore, the original price was 5 times this, or $25.
The price started at $25, and was reduced to $20. Finally, the $20 price is increased by 20 percent. 20 percent of $20 is 1/5 of $20, or $4. The final price is $24 and the answer is (C).
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