If the price of an article is decreased by 20% and then the new price is increased by 25%, then what is the net change in the price?
Answer & explanation
Answer: (a) 0%
A 20% cut takes ₹100 to ₹80, and 25% of 80 is 20, bringing it back to ₹100. The multipliers 0.8 × 1.25 = 1, so there is no net change.
- Let the price be ₹100. After a 20% decrease it is ₹80.
- A 25% increase on ₹80 is ₹20, giving ₹100.
- Net change = 0%.
- Check: 0.8 × 1.25 = 1.
Remember · Successive changes multiply: a fall of 1/5 is exactly undone by a rise of 1/4.
Question and answer: UPSC's official GS Paper II (2021, Series A) — paper ↗ · answer key ↗. Explanation: Minimalist IAS, checked 30 Sept 2026 (how we verify). ·