Net Percentage Change for Equal Increase/Decrease

Trick / Shortcut
Net Percentage Change for Equal Increase/Decrease
Topic
Percentages
How It Works

If a value is first increased by $x%$ and then decreased by $x%$, the net change is always a decrease.

Net Change Formula: $- \left(\frac{x^2}{100}\right)%$

This formula quantifies the net loss. It shows that successive equal percentage changes do not cancel each other out to zero net change.

Example

A price increases by $20%$ and then decreases by $20%$.

Using the formula, $x = 20$: Net Change $= - \left(\frac{20^2}{100}\right)% = - \left(\frac{400}{100}\right)% = \textbf{-4%}$

This means there is a net $\mathbf{4%}$ decrease.

Example calculation: Starting with NPR 100:

  1. Increase by $20%$ ($100 \times 1.20 = 120$)
  2. Decrease by $20%$ ($120 \times 0.80 = 96$)

The final value is NPR 96, which is a $4%$ decrease from the original NPR 100.

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