Question

Tania believes that if she increases the price of an item (mark up) by 10% and then decrease it (mark down) by 10%,she will have the original tag price again. Her teacher tells her that her computation is incorrect. Why is tania wrong? Justify your answer.

Answer 1

She is incorrect as 10% of the higher marked up price is larger than 10% of the original price.

For example: If you mark up $100 by 10% you get $110.

If you mark down $110 by 10%, you will get $99, as 10% of $110 ($11) is larger than 10% of $100 ($10).