Shortcut Trick
Net percentage change = a + b + (a × b)/100
Net Increase = 4 + 25 + (4 × 25)/100 = 29 + 1 = 30%
Current Sales = 100% + 30% = 130% = ₹208,000
Initial Sales (100%) = (208,000 ÷ 130) × 100 = 1,600 × 100 = ₹1,60,000
∴ The correct answer is ₹1,60,000.
Alternate Method
Given:
Current Sales = ₹208,000
Increase in 1st year (r1) = 4%
Increase in 2nd year (r2) = 25%
Formula Used:
Final Value = Initial Value × (1 + r1/100) × (1 + r2/100)
Initial (X) +4% Year 1 +25% ₹208,000 Successive Increase Timeline
Calculations:
⇒ Let the sales two years ago be ₹X.
⇒ X × (1 + 4/100) × (1 + 25/100) = 208,000
⇒ X × (104/100) × (125/100) = 208,000
⇒ X × (26/25) × (5/4) = 208,000
⇒ X × (130/100) = 208,000
⇒ X × 1.3 = 208,000
⇒ X = 208,000 ÷ 1.3
⇒ X = 1,60,000
∴ The correct answer is ₹1,60,000.
Additional Information
Successive Percentage Change
When a value changes by a% and then by b%, the net effective change is given by (a + b + ab/100)%. For decrease, use negative values for a or b.
Reverse Percentage Calculation
To find the initial value given the final value and percentage increase (r%), use Initial = Final ÷ (1 + r/100).
Ratio Method for Successive Change
Express percentages as fractions (e.g., 25% = 1/4). If it's an increase, the ratio is 4:5. Multiply successive ratios to get the overall initial:final ratio.
Population/Depreciation Formula
Value after n years = P × (1 ± r/100)n. This formula is essentially the same as compound interest.