A 6th-Grade Math Problem: Price Up 20%, Then Down 20% — What Was It Originally?
I came across this problem — it looks simple, but I actually had to think about it. I’m publishing it because understanding it is genuinely useful in real life: people get it wrong both in shops and with investments.
Problem:
A product’s price first went up by 20% and then went down by 20%, ending at $320. What were the original and the intermediate prices?
The first instinct is “up 20%, down 20%, so the price is back where it started — $320”. That’s wrong. Try to solve it yourself before reading on.