Price of a house came down by 20% during recession. After one year, the price increased by 25%. What was the effective change percent in the price of house over the original price?
1). 0%
2). 5%
3). -5%
4). 10%
Let the price of a house be Rs. 100
Given,
Price of a house came down by 20% during recession,
Price of a house during recession
= 100 - 100 × (20/100)
= 80
Price of a house during recession is Rs. 80
Given,
Price increased by 25%.
Price of a house after increment
= 80 + 80 × (25/100)
= 80 + 20
= 100
∴ Price after increment is Rs. 100 which is equal to original price of a house.