The price of a cycle is reduced by 25 per cent. The new price is reduced by a further 20 per cent. The two reductions together are equal to a single reduction of

45%
40%
35%
32.5%

Correct Answer: 40%

Explanation:

Let the original price of the cycle be 100. After the first reduction the price will be 75.

This new price is then reduced by 20% = 0.8 x 75 = 60

60 represents a reduction of 40 percent on the original.

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