The price of a car is increased by 25%, by how much percent, must the new price

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Question
The price of a car is increased by 25%, by how much percent, must the new price of this car be decreased to restore its original price ?
Options
A. 20%
B. 24%
C. 21%
D. 25%

Correct Answer

20%

Explanation

Suppose that the original price of the car = Rs. x

Then new price of the car

$= x + x \times \frac{25}{100} = \frac{5}{4} x R s$

To restore the original price, the new price must be decreased by

$\frac{5}{4} x - x = \frac{x}{4} R s$

So required percentage $= \frac{\frac{x}{4}}{\frac{5}{4} x} \times 100 %$

= 20%

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