Question 42 of 45intermediate🔧 ApplyNumerical3 marks

The bus fares were increased by 3% last year and by 4% this year. What is the overall percentage price increase in the last 2 years?

Correct Answer

Given: Let original fare = ₹100

Calculation: After 3% increase = ₹103 After 4% increase on ₹103 = ₹103×1.04103 \times 1.04 = ₹107.12

Answer: Overall increase = 7.12%

Note: This is not simply 3% + 4% = 7% because the second increase is on a higher base.

Exercise: Figure it Out (Section 5) | Q: 10 | (Page Page 29)
For More Understanding

Explanation

The chapter explains that successive percentage changes compound, they don't simply add. The second increase is applied to the already-increased amount.

Solution Steps

  1. Let original fare = ₹100

  2. After 3% increase = ₹103

  3. After 4% increase = 103×1.04103 \times 1.04 = ₹107.12

  4. Overall increase = 7.12%

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