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A jacket costs $100. On Monday, the store raises the price by 20%. On Tuesday, they run a 20% OFF sale. What’s the final price on Tuesday?

Options:A) $96B) $100C) $104D) $120

Correct Answer:A) $96

Start from the original: $100.
Monday mark-up ( +20% ): $100 × 1.20 = $120.
Tuesday discount ( −20% of the new price ): $120 × 0.80 = $96.
Conclusion: A +20% increase followed by a −20% decrease does not return to the original; the net effect is −4%overall (because 1.20 × 0.80 = 0.96).
Common Trap:Thinking “+20% and −20% cancel, so it’s back to $100.” Percentage changes apply to different bases—the discount is taken on $120, not $100.

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