Question

State whether the following statement is true or false, If the statement is false, state the true change. If the profits in your consulting business increase by 7% one year and decrease by 2% the following year, your profits are up by 5% over two years Select the correct choice below and, if necessary, fill in the answer box within your choice. O A True OB. False; If the profits in your consulting business increase by 7% one year and decrease by 2% the following year, your profits are up by (Round to two decimal places as needed.) % over two years Click to select and enter your answer(s)

Answer 1

Answer

The statement is true.

The profits are up by 5% over two years is true.

Explanation

The best way to know if this is true or false is to solve the problem.

Let the profits of the consulting business be p.

In one year, the profits increased by 7%

New profit = p × 1.07 = 1.07p

In another year, the profits decreased by 2%

New profit = (1.07p) × (0.98) = 1.0486p = 1.05p

So, we can see that 1.05p is 5% more than p.

So, this statement that the profits are up by 5% over two years is true.

Hope this Helps!!!