The price of a Maruti car rises by 30% while the sales of the car come down by 20%. What is the percentage change in the total revenue?
Explanation:
This can simply be solved by multiplying the two multiplication factors to get the effective multiplication factor. e.g. multiplication factor for 30% increase = 1.30. Multiplication factor for 20% decrease = 0.8. Hence, 1.30 × 0.8 = 1.04. This multiplication factor (i.e. 1.04) indicates that there is a 4% increase in total revenue. So the answer is +4.
Alternative method: By using the formula x + y + xy100
∴ x = +30%; y = – 20%
⇒ 30 + 60 + 50(-20)100
= 30 – 20 – 6 = +4%
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