Question : The salary of Ramesh first increases by 35%, then decreases by 40%, then again increases by 25%. Find the overall increase or decrease percentage.
Option 1: Increase by 1.25%
Option 2: Decrease by 2.25%
Option 3: Decrease by 1.25%
Option 4: Increase by 2.25%
Correct Answer: Increase by 1.25%
Solution :
Let the initial salary of Ramesh be 100.
After a 35% increase, the salary becomes = 135
Then, after a 40% decrease, the salary becomes = 135 – 0.40 × 135 = 81
Finally, after a 25% increase, the salary becomes = 81 + 0.25 × 81 = 101.25
So, the overall change in salary = $\frac{101.25 - 100}{100}$ × 100 = 1.25%
Hence, the correct answer is 'Increase by 1.25%'.
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