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I was doing my math homework last night with Benji's radio blaring (as usual) in the background.
"Hey, Mike, did you hear that commercial?" Benji called from the next room.
"No. What's it for?"
"Remember that stereo you heard about at Sweeters? Then, when you got to the store, they'd raised the price by 25%. Now, they say they've lowered the prices on their stereos by 25%. So the one you wanted has to be the same price as it was at first."
"Sounds good," I said. "But if the price is down 25%, I think it's gotta cost even less than it cost at first."
"No way. Up 25%, then down 25%, means you're back where you started from," Benji tried to assure me.
Who's right about the price, Mike or Benji? Is the price of the stereo the same as it was when Mike first heard about it or is the price even less than it was at first?
"Hey, Mike, did you hear that commercial?" Benji called from the next room.
"No. What's it for?"
"Remember that stereo you heard about at Sweeters? Then, when you got to the store, they'd raised the price by 25%. Now, they say they've lowered the prices on their stereos by 25%. So the one you wanted has to be the same price as it was at first."
"Sounds good," I said. "But if the price is down 25%, I think it's gotta cost even less than it cost at first."
"No way. Up 25%, then down 25%, means you're back where you started from," Benji tried to assure me.
Who's right about the price, Mike or Benji? Is the price of the stereo the same as it was when Mike first heard about it or is the price even less than it was at first?
Answer
Mike is right. The price of the stereo is less than it was before the 25% increase and the 25% decrease.Pretend that the stereo cost $1,000. You know that 25% of 1,000 is 250. So, after the 25% increase, the cost of the stereo was $1,250. Now find 25% of $1,250. Subtract this amount ($312.50) from $1,250 to find the reduced price. It's $937.50 - that's $62.50 less than the original price of $1,000!
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