Does the combined effect of a 20% increase followed by a 20% decrease differ from the combined effect of a 20% decrease followed by a 20% increase? Justify your answer.

Question

Quizplus · Accepted Answer

If you think of the relevant formula, V_f = V_i (1 + c₁) (1 + c₂), the order of the percent changes affects the order of multiplication. However, it is a basic axiom of mathematics that the order of multiplication does not affect the product.

Does the Combined Effect of a 20% Increase Followed by a 20