Which statement best describes the effect of applying a 10% discount on a price that has already increased by 12%?

Which statement best describes the effect of applying a 10% discount on a price that has already increased by 12%?

• A. Net decrease of 0.8%
• B. Net increase of 0.8%
• C. Net unchanged
• D. Net increase of 2%

Answer: (B)

Percent changes applied one after another multiply the factors involved. A 12% rise makes the price 1.12 times the original. Applying a 10% discount on that higher price multiplies by 0.90, giving 1.12 × 0.90 = 1.008 of the original price. That is a final price 0.8% higher than the original, i.e., a net increase of 0.8%. So the correct description is a small net increase, not a decrease, not unchanged, and not a 2% rise.

Percent changes applied one after another multiply the factors involved. A 12% rise makes the price 1.12 times the original. Applying a 10% discount on that higher price multiplies by 0.90, giving 1.12 × 0.90 = 1.008 of the original price. That is a final price 0.8% higher than the original, i.e., a net increase of 0.8%. So the correct description is a small net increase, not a decrease, not unchanged, and not a 2% rise.