The cost of an article is increased by 20% in the first year. In the second year the increased cost is decreased by 24%. If the final cost of the article is ₹1,938, find the original cost of the article.
- AOption (a)
₹2,148
- BOption (b)
₹2,196
- COption (c)
₹2,160
- DOption (d)
₹2,125
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Correct answer
₹2,125
Why this answer is correct
Shortcut Trick
Effective percentage change = 20 − 24 − (20 × 24)/100 = −8.8%
Final cost as percentage of original = 100% − 8.8% = 91.2%
Given that 91.2% = ₹1,938
Original cost (100%) = (1,938 ÷ 91.2) × 100 = ₹2,125
∴ The correct answer is ₹2,125.
Alternate Method
Given:
First year increase = 20%
Second year decrease = 24%
Final cost of the article = ₹1,938
Calculations:
⇒ Let the original cost of the article be ₹x.
⇒ After 20% increase, cost = x × (1 + 20/100) = 1.2x
⇒ After 24% decrease on the increased cost, final cost = 1.2x × (1 − 24/100)
⇒ 1,938 = 1.2x × 0.76
⇒ 1,938 = 0.912x
⇒ x = 1,938 ÷ 0.912
⇒ x = 2,125
∴ The correct answer is ₹2,125.
Additional Information
Successive Percentage Change Formula
When a value is changed by a% and then by b%, the net change is given by (a + b + ab/100)%. Use positive for increase and negative for decrease.
Multiplying Factor Method
For an increase of r%, multiply by (1 + r/100). For a decrease of r%, multiply by (1 − r/100).
Reverse Percentage Calculation
To find the original value when the final value and percentage change are known: Original Value = Final Value ÷ (Net Multiplying Factor).