If the price of a television set is increased by 25%. then by what percentage should the new price be reduced to bring the price back to the original level ?

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Submitted by examrobotsa on

Q: 136 (IAS/1996)
If the price of a television set is increased by 25%. then by what percentage should the new price be reduced to bring the price back to the original level ?

question_subject: 

Maths

question_exam: 

IAS

stats: 

0,4,7,1,4,4,2

keywords: 

{'percentage': [1, 2, 2, 3], 'new price': [0, 1, 0, 0], 'price': [0, 3, 1, 12], 'television set': [0, 1, 0, 1]}

When the price of a television set is increased by 25%, the new value is 125% of the original price (as 100% + 25% = 125%). To bring the price back to the original level, we need to find a percentage that when taken of this increased price (125%) will remove the added 25%.

Option 1 (15%) is incorrect because if we reduce the price of the increased price by 15%, which is 18.75% of the original price, we’re still left with a price that is higher than the original.

Option 2 (25%) is incorrect because if we deduct 25% from the increased price, it corresponds to reducing 31.25% of the original price. This leads to a price that is less than the original.

Option 3 (20%) is correct because if we reduce the increased price by 20%, it will bring the price back to the original level. It corresponds to reducing the increased price by 25% of its original value.

Option 4 (30%) is incorrect since it reduces the price by a larger amount than the original increasing percentage, resulting in a price that is less than the original.