An antique store increases all of its prices by 40%, and then announces a 25%-off-everything sale. What percent of the original prices (before the increase) is the new prices?
Suppose the price of the average item =$100
Then an increase of 40% will up the price to $140
$140 - ($140*0.25) =$105 - the average price of an item after 25% discount.
Therefore the "net" increase after the original 40% increase and the subsequent 25% discount will be:
$105 - $100 =$5, or 5%.
Note: It would have been exactly the same had the store raised all prices by 5% instead of raising them by 40% and then discounting them by 25%.
Suppose the price of the average item =$100
Then an increase of 40% will up the price to $140
$140 - ($140*0.25) =$105 - the average price of an item after 25% discount.
Therefore the "net" increase after the original 40% increase and the subsequent 25% discount will be:
$105 - $100 =$5, or 5%.
Note: It would have been exactly the same had the store raised all prices by 5% instead of raising them by 40% and then discounting them by 25%.
