Two successive price increases of 10% each on an article are equivalent to a single price increase of

Concept & Formula The equivalent single percentage change for two successive percentage increases of $a\%$ and $b\%$ is calculated using the effective change formula: $$Equivalent Increase = a + b + \frac{a \times b}{100}$$ Step-by-Step Solution * **Given:** The two successive increases are $a = 10$ and $b = 10$. * **Calculation:** Substitute the values into the formula: $$Equivalent Increase = 10 + 10 + \frac{10 \times 10}{100}$$ $$Equivalent Increase = 20 + \frac{100}{100}$$ $$Equivalent Increase = 20 + 1 = 21\%$$ Exam Strategy & Shortcut Successive $10\%$ increases are extremely common in banking and aptitude exams. Memorize this sequence: 10% followed by 10% is always a 21% net increase. If you assume a base of 100, the first increase makes it 110, and an additional 10% of 110 is 11. $110 + 11 = 121$, proving the 21% total increase. Common Pitfall Many students quickly skim the question and mistakenly add $10 + 10 = 20\%$ directly (Option B). You must remember that the second 10% increase acts on the new, higher intermediate price, adding slightly more absolute value than the first increase did. Final Answer **Therefore, the correct answer is 21%.**