Question

If the profits in your consulting business increase by 5​% one year and decrease by 3​% the following​ year, your profits are up by ____% over two years. How do I solve this question?

Answer 1

Let the original profits be $x. 5% increase in profits will give us:
105/100×x=$1.05x
3% reduction in new profits ill give us the latest amount to be:
97/100×1.05x
=$1.0185x
comparing our new profits to our original amount of $x we shall have new percentage increase to be:
(1.0185x-x)/x×100
=1.85% 
Thus our final increase  1.85%